Why Marvell's stock is soaring toward its best day in months after earnings

By Britney Nguyen

Marvell talks up dramatic new growth projections that are meaningfully higher than what Wall Street was expecting

Marvell's stock was climbing in after-hours trading on Tuesday.

Marvell Technology gave an upbeat outlook for its data business as it looks ahead to next year, and that's boosting its stock.

The chip company expects that fiscal 2027 data-center revenue could be up more than 25% from a year earlier. That implies meaningful upside to the FactSet consensus, which had analysts looking for 16% growth. The company's forecast also doesn't bake in assumptions related to the newly announced acquisition of Celestial AI.

Marvell's stock (MRVL) shot 8.7% higher in Tuesday's extended session after management shared that commentary on its quarterly earnings call, reversing an earlier after-hours decline. A gain of that magnitude, were it to carry through Wednesday's close, would be Marvell's biggest one-day move since April.

"Customers are planning to add substantial AI capacity over the next several years, and are partnering closely with us on long-term technology roadmaps and coordinated capacity planning," CEO Matt Murphy said on the call. "In addition to benefiting from rapid market expansion, we have several of our own unique growth drivers."

As such, Marvell's fiscal 2028 data-center revenue growth could "accelerate meaningfully" from the projected fiscal 2027 rate, he added.

The company, which designs chips and provides networking solutions, has seen its shares fall more than 15% so far this year through Tuesday's close.

The long-term outlook was the highlight of the report, as Marvell's fiscal third-quarter results merely edged past the consensus view. Revenue for the quarter came in at $2.075 billion, up 37% from a year ago, and slightly ahead of the FactSet consensus for $2.069 billion. The company reported adjusted earnings of 76 cents a share, which topped the 74 cents that analysts tracked by FactSet were expecting.

The company's record third-quarter revenue was "driven by strong demand for our data-center products," Murphy said in a statement.

For the fiscal fourth quarter, Marvell said it expects revenue to be $2.2 billion, plus or minus 5%, which is in line with the $2.2 billion analysts were modeling.

Despite being positioned "as an important player in custom silicon for AI hyperscalers," Ethan Feller, a stock strategist at Zacks Investment Research, said Marvell's stock had been down on the year because prior earnings results "have fallen short of the lofty expectations Wall Street placed on the business."

See more: Could Marvell get a buyout bid? Here's why a SoftBank deal might make sense.

Ahead of the earnings report, Morgan Stanley's Joseph Moore said he thought the market had moved "past the phase of inflated Trainium expectations for a few quarters now," referring to the AI training chips Marvell designed with Amazon.com (AMZN). Moore said expectations for the chips "have reset again, but it continues to be a noisy debate."

In the last quarter, Marvell had said that weakness in its custom chips business was tied to "timing issues related to when the customer builds are occurring," Moore noted.

Read: Marvell has 'huge potential,' these analysts say. Here's why they downgraded the stock anyway.

Murphy also confirmed Marvell's acquisition of Celestial AI, which he said "further strengthens" the company's position in interconnect technology - "one of the fastest-growing opportunities in AI data-center infrastructure." The Information reported on Monday evening that Marvell was in advanced talks to buy the AI startup.

Marvell said that it completed a $2.5 billion sale in cash of its automotive ethernet business to Infineon Technology (XE:IFX) during the quarter, "which resulted in a pre-tax gain on sale of $1.8 billion." The company said its fiscal third-quarter results included sales from its automotive ethernet business through Aug. 14, which is when the sale happened.

-Britney Nguyen

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12-02-25 2018ET