Marvell stock surges as strong AI demand yields earnings beat, strong guidance

Marvell Technology Inc (NASDAQ:MRVL ) reported third-quarter fiscal 2025 earnings that exceeded analyst expectations, driving its stock nearly 13% higher in premarket trading Wednesday. The company also provided an optimistic outlook for the fourth quarter, citing robust demand for its AI-related products.

The data infrastructure semiconductor solutions provider posted adjusted earnings per share of $0.43, surpassing the analyst consensus of $0.41. Revenue for the quarter reached $1.52 billion, beating estimates of $1.45 billion and marking a 7% increase YoY.

Marvell's fourth-quarter guidance also impressed investors. The company forecasts revenue of $1.8 billion (+/- 5%), significantly above the $1.646 billion consensus. Adjusted EPS is expected to be $0.59 (+/- $0.05), topping analyst projections of $0.52.

Matt Murphy, Marvell's Chairman and CEO, attributed the strong performance to AI-driven demand. "Marvell's fiscal third quarter 2025 revenue grew 19% sequentially, well above the mid-point of our guidance, driven by strong demand from AI," he stated.

The company anticipates continued momentum, projecting 26% YoY revenue growth for the fourth quarter. Murphy added, "We look forward to a strong finish to this fiscal year and expect substantial momentum to continue in fiscal 2026."

Marvell's third-quarter GAAP gross margin was 23.0%, while non-GAAP gross margin reached 60.5%. 

Analysts at B. Riley Securities believe Marvell's print "shows a powerful next-gen AI growth inflection is on track toward robust long-term targets, even as enterprise-centric businesses increasingly put an unusually protracted and deep cyclical correction behind them."

The firm lifted its MRVL price target from $105 to $135, maintaining a Buy rating. 

Separately, analysts at Morgan Stanley (NYSE:MS ) voiced more cautious comments. They acknowledge a strong quarterly performance and a robust outlook, driven chiefly by stronger builds of Trainium 2 chips for Amazon (NASDAQ:AMZN ).

This should help maintain the near-term momentum for MRVL, however, "high valuation and 2026 headwind potential keeps us Equal Weight," analysts led by Joseph Moore said.

The firm lifted the price target from $82 to $102 on Marvell shares. 

Senad Karaahmetovic contributed to this report. 

Source: Investing.com