Marvell Technology: AI drives impressive quarterly figures and optimistic outlook

The semiconductor solutions provider Marvell Technology exceeded analysts' expectations with its third-quarter results of fiscal year 2025, propelling its stock up by almost 13% in pre-market trading. Optimism for the fourth quarter is primarily based on the strong demand for its AI-related products. With an adjusted earnings per share of $0.43, Marvell surpassed the consensus estimate of $0.41. Quarterly revenue reached $1.52 billion, exceeding the estimated $1.45 billion, representing a 7% increase year-over-year. The fourth-quarter forecast was also positively surprising. Marvell expects revenue of $1.8 billion (+/- 5%), which is significantly above the consensus of $1.646 billion. The adjusted earnings per share are projected to be $0.59 (+/- 0.05), surpassing the forecasts of $0.52. CEO Matt Murphy attributes the strong figures to high demand in the AI segment. "Marvell's revenue in the third quarter of fiscal year 2025 grew by 19% compared to the previous quarter, well above the midpoint of our forecast, driven by AI demand," explained Murphy. For the fourth quarter, the company forecasts a 26% year-over-year revenue growth and looks optimistically towards the coming fiscal year. The GAAP gross margin for the third quarter was 23.0%, while the non-GAAP gross margin reached 60.5%. Analysts from B. Riley Securities view Marvell's development as an indicator of a strongly positive shift in the next-generation AI growth sector. While companies increasingly leave a prolonged economic adjustment behind, the company remains optimistic about its long-term goals. Hence, B. Riley raised the price target for Marvell's stock from $105 to $135 and reaffirmed the buy recommendation. In contrast, analysts from Morgan Stanley expressed more cautious views. They acknowledge the strong quarterly performance and positive forecast, driven primarily by the accelerated deployment of Trainium-2 chips for Amazon. This should maintain Marvell's short-term momentum; however, due to high valuations and potential challenges for 2026, they continue to foresee with an 'Equal Weight' rating. Morgan Stanley raised the price target for Marvell from $82 to $102.