Shares Of Marvell Rocket 32% On Strong Earnings And 'Tremendous' Possibilities For A.I.

Marvell Technology witnessed a significant surge in its stock price during overnight trading on Friday, soaring approximately 32% as a result of its impressive quarterly earnings performance, surpassing expectations in both revenue and earnings.

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In the first quarter, the chipmaker reported adjusted earnings per share of 31 cents, exceeding the Refinitiv consensus estimate of 29 cents per share. Furthermore, the company's revenue for the period amounted to $1.32 billion, surpassing the analyst consensus of $1.3 billion. This strong performance propelled Marvell shares to levels not seen since April 2022.

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During an analyst conference call, Marvell CEO Matthew Murphy highlighted the company's evolving perspective on the substantial business potential of artificial intelligence (AI). Murphy stated that while AI was previously considered one of many applications within cloud computing, its importance and associated opportunities have now significantly increased.

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In a note to investors, Citi analysts emphasized Marvell's significant opportunity for growth in AI-driven revenue. Citi raised its price target from $58 to $61 while maintaining a buy rating. Atif Malik, an analyst at Citi, stated that Marvell estimated its AI revenue to be approximately $200 million for FY2023, representing a substantial increase from FY22. The company expects AI sales to reach over $400 million in FY24 and double again in FY25.

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The impressive earnings report from Nvidia on Wednesday, which exceeded expectations, provided a lift to several semiconductor firms. As a result, Nvidia's market capitalization has now approached the $1 trillion mark, influencing the positive sentiment within the semiconductor industry.

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