Home / Business and Economy / Marvell Beats AI Revenue Estimates, Shares Dip
Marvell Beats AI Revenue Estimates, Shares Dip
28 Aug
Summary
- Marvell Technology forecast quarterly revenue above estimates.
- Shares fell nearly 3% after nearly tripling year-to-date.
- A custom chip deal with Google could bring $120 billion.
Marvell Technology announced a forecast for its third-quarter revenue that surpassed analyst expectations. This news comes after a significant rally in its stock, which has nearly tripled in value this year due to increased investment in AI data centers by major tech companies.
The company's custom silicon business has seen surging demand. This is driven by Big Tech's efforts to develop cost-effective alternatives to high-priced, supply-limited processors, particularly for AI applications. The shift in AI usage from training to deployment further boosts the demand for these specialized chips.
Marvell's second-quarter results showed robust growth, with sales rising 37% to $2.74 billion. Data center revenue was a key driver, increasing by 46% to $2.17 billion. The company anticipates third-quarter revenue to be around $3.15 billion, with adjusted profit per share expected at $1.10.
A landmark custom chip deal struck with Google is set to generate up to $120 billion in revenue through fiscal 2033. This agreement also positions Google to become a major investor in Marvell, acquiring up to a $12.2 billion stake. This deal is a significant strategic win, enhancing Marvell's custom chip customer base and its competitive standing against rivals like Broadcom.
