Marvell Technology (MRVL) stock rallied after wavering Tuesday after the chipmaker reported earnings and sales that exceeded Wall Street’s targets for its fiscal third quarter. Marvell also announced a deal to acquire chip startup Celestial AI.
The Santa Clara, Calif.-based company earned an adjusted 76 cents per share on sales of $2.08 billion in the quarter ended Nov. 1. Analysts polled by FactSet were forecasting earnings of 74 cents per share on sales of $2.07 billion. On a year-over-year basis, Marvell earnings rose 77% as sales climbed 37%.
For the current quarter, Marvell forecast adjusted earnings of 79 cents per share on sales of $2.20 billion. Prior to the company’s results, Wall Street had been modeling earnings of 79 cents per share on sales of $2.18 billion for its fiscal fourth quarter.
Marvell makes semiconductor products for data centers, including server processors, AI accelerators, and networking and storage chips. It also makes chips for enterprise networking, carrier infrastructure, consumer devices, and automotive and industrial applications. Major clients include Amazon (AMZN) and Microsoft (MSFT).
“We are guiding for robust growth in the fourth quarter and are on track for a strong finish to the fiscal year, with full-year revenue growth forecast to exceed 40%,” said Chief Executive Matt Murphy in a news release. “Looking ahead, we see demand for our products continuing to accelerate, and as a result, our data center revenue growth forecast for next year is now higher than prior expectations.”
Meanwhile, Marvell separately announced a deal to acquire Celestial AI, which the company called “a pioneer of a disruptive photonic fabric technology platform purpose-built for scale-up optical interconnect.” The $3.25 billion deal includes $1 billion in cash and $2.25 billion in Marvell common stock, according to the announcement.
Marvell Stock Bounces Back
In after-hours trading on the stock market today, Marvell stock initially fell sharply in late trades. But the shares later bounced back, climbing more than 8%. During the regular session, Marvell gained 2%.
Marvell stock suffered a deep loss earlier in the spring following a strong run in 2023 and 2024. Shares have bounced back but remain down 15% year to date.
However, Marvell has a strong IBD Composite Rating of 96 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Shares of the chipmaker are extended past a buy range after clearing an 85.27 consolidation-pattern buy point on Oct. 2, according to IBD MarketSurge.
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