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Marvell Stock Soars. It Could Be Getting a Data-Center Boost From Amazon.

Dec 02, 2025 15:15:00 -0500 by Angela Palumbo | #Chips #Earnings Report

Marvell stock has declined 16% this year. (David Paul Morris/Bloomberg)

Key Points

Marvell Technology stock jumped after the company forecast stronger-than-expected growth in its data-center segment, boosting confidence in its custom chip business.

Shares shot up after executives said Marvell’s data-center revenue was expected to grow by more than 25% next fiscal year, exceeding Wall Street estimates. The following year, management expects 40% growth.

Marvell shares were up 6.5% at $98.94 in morning trading Wednesday.

Marvell surged 83% in 2024 as investors bet that clients would spend big on custom AI hardware. However, the stock has dropped 16% this year as Marvell struggles to convince the market it can win long-term deals with key customers such as Amazon.com and Microsoft amid tough competition. The latest growth forecast appears to have dispelled some of those concerns.

“Management provided guidance for fiscal 2027 and fiscal 2028 that came in ahead of consensus expectations, and bridges the gap between current data center revenue and the previously telegraphed $19 billion data center revenue target for fiscal 2029,” wrote William Blair analyst Sebastien Naji in a research note.

Naji kept an Outperform rating on the stock, noting it was trading at 27 times his estimate for Marvell’s per-share earnings in 2026.

Marvell’s key custom AI chip client is Amazon, which launched its Trainium 3 chips on Tuesday. While Amazon didn’t comment on its partners, analysts suggested Marvell’s upbeat outlook suggests it has won contracts for both Trainium 3 and the next-generation Trainium 4.

“We think there is little else to conclude other than the following: Marvell has been awarded the Trainium4 (2nm) program by AWS [Amazon Web Services],” wrote J.P.Morgan analyst Harlan Sur in a research note. “Overall, we see a solid setup for the company, driven by the continued recovery in its cyclical businesses and sustained AI growth tailwinds.”

Sur kept an Overweight rating on the stock and raised his price target to $130 from $120.

Marvell reported third-quarter adjusted earnings of 76 cents a share on revenue of $2.08 billion. Analysts surveyed by FactSet were expecting earnings of 74 cents a share on revenue of $2.07 billion.

Data-center revenue, which accounts for the majority of Marvell’s sales, was $1.52 billion, growing 38% from the prior year. It came in just above Wall Street estimates of $1.51 billion.

CEO Matt Murphy said in the earnings release that the company’s third-quarter revenue results were “driven by strong demand for our data center products.”

Marvell said it expects fourth-quarter adjusted earnings to be 79 cents a share, plus or minus 5 cents. Wall Street has been forecasting 79 cents a share. Revenue for the quarter is expected to be $2.2 billion, plus or minus 5%, compared to analyst estimates of $2.18 billion.

The company also announced that it would be acquiring Celestial AI for in a cash and stock deal valued at approximately $3.25 billion.

Celestial AI specializes in optical networking technology, a potential solution to the need to connect hundreds of thousands of AI chips. Marvell said Celestial AI will start to boost its financial results in fiscal 2028, with the full impact showing up in the following years.

“We believe that a combination of motivation (the technology is more badly needed today) and improved technology (Marvell’s PR suggests Celestial AI has a design win at a large CSP [cloud service provider]) means that the technology is on the verge of commercial adoption,” wrote Truist Securities analyst William Stein in a research note.

Write to Angela Palumbo at angela.palumbo@dowjones.com and Adam Clark at adam.clark@barrons.com