Take Advantage of a Post-Earnings Surge With an Options Trade on This Chipmaker

Marvell Technology is preparing to release its fiscal second-quarter results on Thursday after the market closes, and expectations are running high. Analysts project earnings growth of more than 50% year-over-year, fueled largely by strong demand for artificial intelligence-related technologies.

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Despite these bullish fundamentals, Marvell’s stock still looks relatively inexpensive. The company is expected to deliver 11% to 12% adjusted EPS growth over the next year, yet the shares trade at just 23 times forward 12-month earnings—a notable discount compared to its average valuation over the past two years.

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The broader environment for Marvell appears highly favorable, particularly given the massive capital expenditures anticipated from hyperscalers and the impressive performance of industry leader Nvidia. So, why does Marvell trade at a lower multiple?

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One possible reason lies in its historical post-earnings performance. Over recent quarters, the stock has averaged a 3.3% drop following earnings reports. In fact, shares have declined after six of the last eight releases, with the notable exception of fiscal Q3 2025, when the stock surged an eye-catching 23%.

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There’s no doubt that AI adoption has driven incremental demand for Marvell’s products. However, the company has yet to demonstrate the kind of pricing power enjoyed by Nvidia. For context, Marvell’s net income margins turned positive just three quarters ago, reaching slightly above 12% in the most recent quarter. While that’s a solid improvement, it pales in comparison to Nvidia’s 50%+ net income margins.

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Marvell closed Friday at $73 per share, placing it about 42% below its all-time high from January but roughly 48% above its late-April low. Based on the company’s historical volatility following earnings, the likelihood of shares trading above $85 or below $60 by the September options expiration (Sept. 19) appears low.

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For investors interested in generating income from this range-bound expectation, an options strategy like selling a September 85/60 strangle could be considered. Here’s how it works:

• Sell the September $85 calls for approximately $1.58
• Sell the September $60 puts for about $1.12

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This combination yields $2.70 in premium, which equates to about 3.7% of Marvell’s current share price in less than four weeks. On an annualized basis, that represents a standstill yield exceeding 50%.

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Of course, no strategy comes without risk. Marvell has surprised the Street in a big way before—most notably during fiscal Q3 2025 (November) and fiscal Q1 2024 (May 2023), when the stock spiked by more than 32% in a single session.

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To hedge against the possibility of another massive upside surprise, traders could add protection by purchasing the September $90 calls for about $0.88. Doing so reduces the premium collected to $1.82, lowering the yield to around 2.5%. While this adjustment trims returns, it caps the maximum upside risk in case Marvell delivers a blowout quarter.

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Marvell’s upcoming earnings report could set the tone for its performance through the remainder of 2025. With AI tailwinds and hyperscaler spending providing a strong backdrop, the key question is whether the company can prove it deserves a higher valuation—and whether the options market is pricing the risk correctly.

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