Marvell Stock Has Been Hot. Now the AI Chip Maker Is Buying Back Shares.

Marvell Technology stock has fallen about 30% this year. (Dreamstime)

Key Points

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• Marvell Technology’s board authorized a new $5 billion stock repurchase program and an additional $1 billion accelerated share repurchase.
• Marvell’s stock rose 4% after the announcement, despite a 30% decline this year, and has climbed 23% in September.
• 34 out of 41 analysts polled by FactSet rate Marvell stock a Buy or equivalent, anticipating a rebound.

Shares of Marvell Technology jumped after the artificial-intelligence chip maker expanded its stock repurchase plan.

Marvell’s board authorized a new $5 billion buyback program, adding to the roughly $1.7 billion remaining from the board’s $3 billion authorization announced last March. Marvell also entered into an accelerated share repurchase agreement, or ASR, with a “leading financial institution” to buy back an additional $1 billion, the company said Wednesday. The transaction is expected to take place Thursday.

Marvell stock rose 3.1% in Wednesday trading.

“This ASR reflects our conviction in the business and the intrinsic value of our stock, as we drive sustained revenue and cash flow growth,” said CEO and Chairman Matt Murphy.

Marvell has struggled to keep up with peers like Broadcom in the AI hardware market, with shares tumbling 30% this year. But the stock has surged in recent sessions, rising eight of the last nine trading days and climbing 23% in September, according to Dow Jones Market Data.

It isn’t clear what has spurred September’s rally, as other AI chip stocks have been mixed in recent weeks. Wall Street had been expecting a rebound, though. Of the 41 analysts polled by FactSet, 34 rate Marvell stock a Buy or equivalent.

Write to Nate Wolf at nate.wolf@barrons.com