(Reuters) – Shares of Marvell Technology (MRVL) Technology rose more than 13% in premarket trading on Wednesday after the chipmaker’s upbeat forecast boosted investor confidence in AI-related stocks.
The company, which produces custom AI chips for a major cloud provider that helps GenAI process large amounts of data quickly, expects fourth-quarter revenue above estimates on Tuesday.
“Marvell is capitalizing on a huge artificial intelligence chip opportunity with a growing portfolio of custom accelerators and a dominant position in optical chips,” Morningstar analysts said in a note.
The company’s market cap could rise by more than $11 billion if premarket gains hold, pushing its valuation to a record $94.37 billion.
“We see strong demand for custom AI continuing in the fourth quarter and have secured supply chain capacity to support our customers’ growth forecasts,” CEO Matt Murphy said Tuesday.
Reuters reported on Tuesday that CEO Murphy is being considered as a potential candidate for the CEO position at struggling chipmaker Intel (INTC). However, Murphy said on a post-earnings call that he remains “100% focused on Marvell.”
Shares of Marvell are up nearly 60% this year, driven by AI-focused picks-and-shovels on Wall Street, which has pushed chipmaker shares to new highs.
Efforts by hyperscalers like Microsoft (MSFT), Meta (META), and Alphabet (GOOG, GOOGL) to reduce dependence on supply-constrained processors from AI chip leader Nvidia (NVDA) have companies like Marvell and its larger rival Broadcom (AVGO) benefited. ).
The company’s data center segment, which includes custom chips, grew 98% in the third quarter to a record $1.10 billion, accounting for more than 70% of total revenue in the quarter, up from about 40% in the same period a year ago.
Other chipmakers also saw gains: Broadcom rose nearly 2% premarket, while Nvidia, Intel, AMD (AMD) and Qualcomm (QCOM) rose between 0.5% and 1.5%.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Tasim Zahid)
