Marvell Technology recently reported its fiscal third-quarter earnings, surpassing Wall Street projections. Despite an initial dip in share price, the stock ultimately rebounded following the announcement of a strategic acquisition and impressive financial results.
Marvell’s Earnings Performance
For the quarter ended November 1, Marvell earned an adjusted 76 cents per share, with total revenue reaching $2.08 billion. Analysts had estimated earnings of 74 cents and sales of $2.07 billion. Year-over-year, Marvell’s earnings increased by 77%, with sales rising 37%.
- Earnings per Share: 76 cents
- Total Revenue: $2.08 billion
- Analysts’ Estimates: 74 cents earnings, $2.07 billion sales
- Year-over-Year Earnings Growth: 77%
- Year-over-Year Sales Growth: 37%
Future Forecast
Looking ahead, Marvell projects adjusted earnings of 79 cents per share for the next quarter, anticipating sales of $2.20 billion. This forecast aligns closely with prior analysts’ models, which expected earnings of 79 cents and sales of $2.18 billion.
Strategic Acquisition of Celestial AI
In addition to its earnings report, Marvell announced plans to acquire Celestial AI for $3.25 billion. This sum will consist of $1 billion in cash and $2.25 billion in Marvell common stock. Celestial AI specializes in photonic fabric technology, aimed at enhancing optical interconnects at scale.
Stock Market Reaction
After the earnings announcement, Marvell’s stock initially experienced a sharp decline in after-hours trading. However, shares rebounded by over 8%, following a 2% increase during regular trading hours. Despite this recovery, Marvell’s stock is still down approximately 15% year-to-date.
Company Outlook
Chief Executive Matt Murphy expressed optimism about future growth. “We are guiding for robust growth in the fourth quarter and expect our full-year revenue growth to exceed 40%,” he stated. Marvell anticipates a continuing demand surge for its data center products, which include server processors and AI accelerators.
Marvell’s Market Position
Marvell Technology serves major clients like Amazon and Microsoft. The company specializes in semiconductor products for various applications, including data centers and automotive technology. It currently holds a high IBD Composite Rating of 96 out of 99, which reflects its strong growth potential.
