Strong demand for AI chips! Another major ASIC manufacturer releases an excellent "report card" with stock price soaring 14% after hours

One day after US Broadcom announced strong earnings, on Thursday Eastern Time, another major ASIC (Application-Specific Integrated Circuit) manufacturer delivered good news: Marvell Technology reported excellent performance, and its revenue guidance for the current quarter will exceed Wall Street expectations.

This indicates that as major tech giants build data centers, driving rapid growth in ASIC demand, companies like Marvell are benefiting. This news caused its stock price to surge over 14% in after-hours trading.

Marvell Reports Strong Earnings

As enterprise customers increasingly adopt AI tools, the demand for specialized chips powering advanced data centers has risen, benefiting companies like Marvell and Broadcom that design ASICs.

Large tech companies including Alphabet, Microsoft, Amazon, and Meta are expected to invest at least $630 billion this year in building AI infrastructure, significantly boosting ASIC demand.

The financial report shows that in the fourth quarter of the last fiscal year (ending January 31 this year),

Marvell’s revenue grew 22% year-over-year to $2.22 billion, slightly above the analyst consensus of $2.21 billion collected by LSEG;

Adjusted earnings per share were 80 cents, slightly above the analyst expectation of 79 cents.

Its largest business segment — data center — saw revenue increase 21% to $1.65 billion, slightly above the analyst forecast of $1.64 billion.

For the first quarter of fiscal 2027, revenue is expected to be around $2.4 billion, with a variance of plus or minus 5%. This figure exceeds the average analyst estimate of $2.27 billion.

Marvell CEO Matt Murphy stated:

“We expect quarterly revenue growth to accelerate year-over-year throughout fiscal 2027, driven by our strong data center performance and record-breaking order volumes.”

Looking ahead, executives forecast that driven by expanding AI infrastructure, data center revenue could grow nearly 50% year-over-year in fiscal 2028.

Optimistic Outlook for the ASIC Market

Marvell and its main competitor Broadcom are helping cloud computing companies design custom chips tailored to their data center workloads. As large-scale enterprises seek alternatives to Nvidia’s general-purpose AI processors, this business is rapidly expanding.

For Marvell, this trend represents a potential “dark horse” growth driver. The company has been involved in multiple custom chip projects related to cloud infrastructure, and demand for these specialized chips is increasingly incorporated into long-term data center investment plans.

On Wednesday Eastern Time, Broadcom stated that it expects AI chip sales to exceed $100 billion next year, indicating its rapidly growing share in the market dominated by Nvidia.

“Like many AI-related stocks, Marvell’s stock has underperformed the overall semiconductor industry over the past two quarters. We believe that the better-than-expected earnings and outlook, while anticipated, mainly provide a psychological relief for investors,” said Kinngai Chan, senior research analyst at Summit Insights.

(Source: Cailian Press)