Why Marvell Technology Rallied in March

Source Domain: www.fool.com

Shares of chipmaker Marvell Technology (MRVL +0.30%) rallied in March, rising 21.3% according to data from S&P Global Market Intelligence.

Marvell had a busy month, reporting fourth-quarter earnings that beat expectations. Later in the month, the company also announced a landmark investment from and product collaboration with Nvidia (NVDA +0.87%).

Today’s Change

(0.30%) $0.32

Current Price

$107.03

Key Data Points

Market Cap

$94B

Day’s Range

$101.13 – $107.26

52wk Range

$47.09 – $107.84

Volume

Avg Vol

18M

Gross Margin

50.10%

Dividend Yield

0.22%

A beat, strong guidance, and a boost from Nvidia

In its fiscal fourth quarter, Marvell reported a 22.1% jump in revenue to $2.2 billion, with adjusted (non-GAAP) earnings per share rising 33.3% to $0.80. Management also guided for a strong 9% sequential jump in revenue in the first quarter, with a guide for $0.79 in adjusted EPS. The reported results and guidance both handily beat analysts’ expectations.

On a more granular level, Marvell management said it expected data center revenue to grow 40% in fiscal 2027 (its current fiscal year), which is higher than the average analyst estimate of 25%. Over the past year, there has been some consternation about whether Marvell has lost market share with its largest customer, Amazon, for Amazon’s custom Trainium chips.

However, the forward guidance indicates that the all-important XPU and XPU-attach business, in which Marvell provides crucial IP for custom AI chips, is alive and well. Notably, Marvell has also diversified its customer base, adding Microsoft to its roster. Microsoft unveiled its updated XPU, the Maia2 chip, back in January. Additionally, the advent of agentic inference could support higher-than-expected growth in the networking part of AI infrastructure, where Marvell excels.

Image source: Getty Images.

The networking factor is likely what led to the late-month announcement that Nvidia will invest $2 billion in Marvell. The investment also includes a product…

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