By Angela Palumbo and Adam Clark
Marvell Technology stock was popping early Friday after the chip maker reported better-than-expected fourth-quarter earnings. Providing custom artificial-intelligence chips and networking products is proving to be a healthy mix.
Marvell posted adjusted earnings of 80 cents a share on revenue of $2.22 billion. Analysts expected earnings of 79 cents a share on revenue of $2.21 billion, according to FactSet.
Data-center revenue in the quarter was $1.65 billion, compared with analyst estimates of $1.63 billion and a 21% climb from the same period last year.
"We expect year-over-year revenue growth to accelerate each quarter in fiscal 2027, driven by continued strength in our data center business, with bookings continuing to grow at a record pace," CEO Mark Murphy said Thursday.
Marvell shares were up 12% at $84.64 in premarket trading. The stock had fallen 11% this year through Thursday's close.
Marvell's business designing custom AI chips -- called application-specific integrated circuits, or ASICs -- has been the focus of investors in recent years. However, much of its growth is being driven by the need for networking products within data centers. The company said it expects its interconnect revenue to grow by more than 50% in fiscal 2027.
In recent months Marvell has announced the acquisitions of optical-networking company Celestial AI for $3.25 billion and interconnect technology company XConn for $540 million.
"Marvell clearly has a robust opportunity set across custom ASICs, interconnects, and now scale-up photonic, and we look forward to seeing it execute (and perhaps even exceed) these new targets," Susquehanna analyst Christopher Rolland wrote in a research note .
Rolland reiterated a Positive rating and $100 target price on Marvell stock.
Marvell said it expects first-quarter earnings of 79 cents a share, plus or minus 5%, and revenue of $2.4 billion, plus or minus 5%. Wall Street was expecting first-quarter earnings of 74 cents a share on revenue of $2.28 billion.
Tech giants like Microsoft and Amazon.com are rushing to build the data centers that house infrastructure needed to power AI workloads. Marvell makes the products that help power those sites, which has helped drive the company's recent revenue growth.
This year's combined capital expenditures from Microsoft, Alphabet, Amazon, and Meta Platforms are expected to be about $650 billion. The continued spending from these hyperscalers could be a boon for Marvell.
Marvell isn't the first chip company to report solid results this week. Broadcom posted better-than-expected first-quarter financials and gave a strong second-quarter outlook on Wednesday night. CEO Hock Tan said that Broadcom had "line of sight" to sales from its AI business significantly exceeding $100 billion in 2027. Broadcom stock fell 0.6% in Friday's premarket, having gained 4.8% the previous day.
While AI products are in high demand, both Marvell and Broadcom rely on a few large customers for a significant amount of business. Investors are paying close attention to customer relationships, with Marvell facing persistent questions over whether it is losing work with Amazon to Taiwan's AIchip Technologies, and business with Microsoft to Broadcom. The latest results could quieten those concerns.
"While we maintain our view that Marvell is currently sharing Amazon's next-generation Trainium 3 design work with Alchip, we believe it ultimately doesn't matter in the overall grand scheme of the company's multiple layering growth drivers," Benchmark Research analyst Cody Acree wrote in a research note Friday.
Acree raised his rating on Marvell stock to Buy from Neutral, with a target price of $130.
Write to Angela Palumbo at angela.palumbo@dowjones.com and Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
March 06, 2026 07:04 ET (12:04 GMT)
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