chip manufacturer marvel technology (Marley) late Thursday edged ahead of Wall Street’s first-quarter accounting targets and guidance. But MRVL shares surged in after-hours trading after the company cited artificial intelligence as a key growth driver.
The Santa Clara, Calif.-based company had sales of $1.32 billion and adjusted earnings per share of 31 cents in the fiscal year ended April 29. Analysts polled by FactSet had expected sales of $1.3 billion and earnings of 29 cents a share. Year-over-year, Marvel’s profits fell by 40% and sales fell by 9%.
For the quarter, Marvell expects revenue of $1.33 billion and adjusted earnings of 32 cents per share. It is based on the midpoint of the perspective. Wall Street was seeking earnings of 30 cents a share on second-quarter sales of $1.31 billion.
“We expect revenue growth to accelerate in the second half of the year as our gross and operating margins expand,” said CEO Matt Murphy. news release.
MRVL stocks surge on AI outlook
Marvel also expects to benefit from increased investment in artificial intelligence, Murphy said.
“AI is emerging as a key growth driver for Marvell, and we are enabling this with our leading network connectivity products and new cloud-optimized silicon platforms,” he said.
Murphy added, “Although we are still in the early stages of our AI launch, we expect our AI revenues to at least double in 2024 compared to the previous year, and continue to grow rapidly over the next few years.” added.
MRVL shares jumped 14.1% to 56.43 in after-hours trading on the stock market today. MRVL shares rose 7.6% to close at 49.47 during Thursday’s regular trading.
MRVL shares are approaching the buy point of 49.58 on a cup basis, according to the IBD Marketsmith chart.
Marvell manufactures networking and data storage chips used in cloud computing, automotive, communications and other applications.
Marvell’s stock ranks 10th out of 37 stocks in IBD’s fabless semiconductor industry group, according to IBD. IBD inventory diagnosis. The MRVL strain has an overall IBD rating of 83 out of 99.
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