Marvell Technology stock surged Tuesday, notching a record closing high, after getting a big endorsement from Nvidia CEO Jensen Huang, who reckons the chips-and-networking company can achieve a market value of more than $1 trillion.
Marvell shares jumped 33% to $290.79 on Tuesday, marking their best daily percentage gain on record, according to Dow Jones Market Data. The stock also notched its best four-day stretch since Oct. 5, 2001, when shares rose 51%, according to Dow Jones Market Data.
Shares continued to rise 10% in after-hours trading.
Marvell currently has a market capitalization of around $254.38 billion.
Nvidia's Huang suggested Marvell's shares could rise fivefold while speaking at the Computex conference in Taiwan alongside Marvell CEO Matt Murphy. Huang pointed to the need for networking infrastructure to connect data centers to power AI data centers.
"That's the reason why Marvell is so essential," the Nvidia CEO said, telling Murphy: "That's why you're going to be the next trillion-dollar company."
Nvidia has invested $2 billion in Marvell as part of a collaboration that will allow customers to use components from both companies to develop semi-custom AI infrastructure.
Nvidia's investments in other companies in the AI ecosystem have raised eyebrows among some skeptics. However, Barron's has argued that it could turn out to be a smart use of its surplus cash, meaning it is not overly reliant on a few big chip customers and is locking in demand for future generations of its AI processors.
Marvell's business designing custom AI chips -- called application-specific integrated circuits, or ASICS -- was the focus of investors until recently.
However, the latest gains -- which have led the stock price to more than triple in the past year -- are being driven by networking products.
The company said in its recent earnings that it expects interconnect revenue to grow by more than 70% in fiscal 2027, up from 50% previously.
One particular driver for Marvell is the shift toward optical-networking. Ever-larger AI data centers require optical transceivers to more efficiently transfer data by converting electrical signals into light and Marvell makes the digital signal processors within those transceivers. Marvell's optical-networking revenue could grow by as much as 90% this year and next, according to Barclays analyst Tom O'Malley.
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.
After investors pushed Marvell stock higher on Tuesday, shares have now advanced 242% this year.
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