Matt Murphy, CEO, Marvell Technology
Scott Mlyn | CNBC
Shares of Marvell Technology continued a significant rally overnight on Friday, jumping about 32% on the back of quarterly results that beat the top and bottom results.
On Thursday, the chipmaker posted first-quarter adjusted earnings per share of 31 cents, higher than Refinitiv’s consensus estimate of 29 cents per share. Revenue reached $1.32 billion for the period, above the analyst consensus of $1.3 billion.
Marvell shares are now trading at levels not seen since April 2022.
In a conference call with analysts, Marvell CEO Matthew Murphy said the company has begun to reassess how it views the “huge” business potential of AI.
“In the past, we considered AI to be one of many applications in the cloud, but its importance and therefore the opportunity has increased dramatically,” Murphy said.
Citi analysts said in a note to investors that the company has a major opportunity to grow its AI-generated revenue. Citi raised its price target from $58 to $61 and maintained its buy rating.
“In FY2023, MRVL estimated its AI revenue at approximately $200 million, which is a large increase from FY22. The company expects AI sales to IA reaches approximately $400 million+ in FY24 before doubling in FY25,” the note from Citi’s Atif Malik reads.
Many semiconductor companies saw an improvement from Nvidia’s earnings report on Wednesday. Nvidia’s market capitalization now sits at nearly $1 trillion.
– CNBC’s Michael Bloom and Chris Hayes contributed to this report.