Matt Murphy, CEO of Marvell Technology
Scott Mill | CNBC
Actions Marvell technology continued its strong run on Friday morning, up about 25% on quarterly earnings results that beat the top and bottom lines.
On Thursday, the chipmaker posted adjusted earnings per share of 31 cents for the first quarter, beating Refinitiv’s consensus estimate of 29 cents per share. Revenue for the period was $1.32 billion, beating analysts’ consensus estimate of $1.3 billion.
Marvell shares are now trading at levels not seen since April 2022.
On a conference call with analysts, Marvell CEO Matthew Murphy said the company has begun to rethink its view of the “enormous” business potential of artificial intelligence.
“In the past, we thought of AI as one of many applications in the cloud, but its importance and, consequently, capabilities have grown dramatically,” Murphy said.
Analysts at Citi said in a note to investors that the company has a strong opportunity to grow revenue from artificial intelligence. Citi raised its price target to $61 from $58 and maintained a buy rating.
“MRVL has estimated its AI revenue at ~$200 million in FY2023, which represents strong growth from FY22. The company expects AI sales to reach ~$400M+ in FY24 before doubling in FY25,” Citi’s Atif Malik said in a note.
Many semiconductor firms were buoyed by Nvidia’s strong earnings report on Wednesday. Nvidia’s market cap is now around $1 trillion.
CNBC’s Michael Bloom and Chris Hayes contributed to this report.