Chipmaker Marvell Technology forecast fourth-quarter revenue above estimates on Tuesday, betting on robust demand for its custom artificial intelligence chips from businesses adopting booming generative AI technology. <\/p>\n
Shares of the Santa Clara, California-based company rose more than 8% in extended trading following the results. The stock hit a record high during Tuesday’s trading session. <\/p>\n
Marvell’s shares have risen nearly 60% this year as Wall Street pours billions of dollars into AI-linked stocks, placing huge bets on the future of genAI technology. <\/p>\n
Shares of larger competitor Broadcom have rallied about 50% this year. <\/p>\n
Demand for advanced chips that can support the complex processing needs of genAI has soared as companies race each other to develop the most sophisticated models. <\/p>\n
The company forecast fourth-quarter revenue of $1.80 billion, plus or minus 5%, compared with analysts’ average estimate of $1.65 billion, according to data compiled by LSEG. <\/p>\n
While the market for AI processors is dominated by Nvidia, Big Tech has been vying to reduce its dependence on the chip leader’s supply-constrained semiconductors, which has helped companies such as Marvell. <\/p>\n
Marvell said on Monday it had expanded its partnership with Amazon.com and entered into a five-year agreement with the tech giant’s cloud unit, which includes supplying custom AI products. <\/p>\n
Revenue in Marvell’s data center segment grew 98% to $1.10 billion in the third quarter from a year ago. Its total quarterly revenue was $1.52 billion, beating estimates of $1.46 billion. <\/p>\n
The company expects its AI revenue to triple to more than $1.5 billion this year and hit $2.5 billion for the next fiscal year, CEO Matt Murphy had said at a company event in April. <\/p>\n
Revenue derived from custom AI chips alone could be between $2.5 billion and $3 billion in 2025 for Marvell, with optical equipment adding another $1.5 billion to $2 billion to AI revenue, Jefferies analysts had said in a note in October. <\/p>\n
On the other hand, customers in the company’s other end-markets such as wireless carriers have been working to drive down chip inventory after excessive buying during the pandemic resulted in a supply glut. <\/p>\n
Marvell forecast an adjusted gross margin of 60% for the fourth quarter, compared with estimates of 61%. <\/p>\n
A significant share of Marvell’s revenue is now derived from custom AI chips as AI-linked demand rises. The company’s custom chips typically carry lower margins than its off-the-shelf products, known as merchant products. <\/p>\n
Marvell’s enterprise networking segment posted a 44% fall to $150.9 million in revenue, while that of the company’s carrier infrastructure unit declined 73% to $84.7 million. <\/p>\n
The company recorded adjusted earnings of 43 cents per share in the third quarter, compared with estimates of 41 cents.<\/p>\n","protected":false},"excerpt":{"rendered":"
Chipmaker Marvell Technology forecast fourth-quarter revenue above estimates on Tuesday, betting on robust demand for its custom artificial intelligence chips from businesses adopting booming generative AI technology. Shares of the Santa Clara, California-based company rose more than 8% in extended trading following the results. The stock hit a record high during Tuesday’s trading session. Marvell’s shares have risen nearly 60% this year as Wall Street pours billions of dollars into AI-linked stocks, placing huge bets on the future of genAI technology. Shares of larger competitor Broadcom have rallied about 50% this year. Demand for advanced chips that can support the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[],"class_list":["post-884099","post","type-post","status-publish","format-standard","hentry","category-it-2"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/884099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=884099"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/884099\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=884099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=884099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=884099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}