Is Marvell Technology Stock a Buy After Providing a Strong Outlook?

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Marvell Technology (MRVL +0.14%) has been one of the hottest stocks in the market this year, with its shares up 141% year to date, as of this writing. After significantly raising its revenue outlook for the next two years, the question is whether the semiconductor stock can continue its strong performance.

Let’s dig into its fiscal first-quarter results and prospects to see if the stock is still a buy.

Image source: The Motley Fool.

Marvell saw surging revenue growth

Marvell is riding two powerful trends with custom AI chips and optical data center components. It provides some important intellectual property (IP) for Amazon‘s Trainium chip and has also helped Microsoft develop its new Maia chip. It’s also a leader in optical interconnects, providing critical networking connectivity for AI data centers.

In fiscal Q1, Marvell’s fiscal Q4 revenue jumped 28% year over year to $2.42 billion. Data center revenue increased by 27% year over year in the quarter to $1.83 billion, while communication segment revenue climbed 29% to $585 million. Its adjusted earnings per share (EPS) rose 29% from $0.62 a year ago to $0.80. Those results were slightly ahead of the midpoint of management’s outlook for adjusted EPS of $0.79 on revenue of $2.4 billion.

Looking ahead, Marvell is projecting fiscal Q2 revenue to grow 35% year over year to around $2.7 billion. It guided for adjusted EPS to be $0.93, up from $0.67 a year earlier.

For the full year, the company significantly upped its forecast, guiding for revenue to grow by 40% to nearly $11.5 billion. That was up from a prior outlook of $11 billion in sales, representing 30% growth. The growth is expected to be driven by its data center business, with revenue now anticipated to climb by 50%, up from an earlier 40% growth outlook. Within that segment, its interconnect business is forecast to surge by 70%, above its prior 50% projection.

This momentum is expected to continue in fiscal 2028, with Marvell projecting 45% revenue…

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