Marvell Stock Poised To Smash $100 Mark On Q3 Earnings Beat: Retail Sentiment Skyrockets To Year's High

By Stocktwits Inc | First Published Dec 4, 2024, 7:03 PM IST

If pre-market gains hold, the data infrastructure semiconductor solutions provider will hit a new all-time high.

Shares of Marvell Technology Inc. are poised to cross the $100 mark when markets open on Wednesday. The stock was up more than 13% in pre-market trading on better-than-expected third-quarter earnings and strong guidance.

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Marvell reported earnings of $0.43 per share, beating estimates of $0.41. Revenue hit $1.52 billion, surpassing the forecast of $1.46 billion and marking a 7% increase year over year (YoY), according to Stocktwits data.

The company saw sequential growth across all of its revenue segments in Q3 2024, with the biggest jump recorded in its data center end market revenue. Revenue from this segment jumped 98% YoY to hit $1.1 billion, driven by the growing demand for AI.

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In Q4, Marvell anticipates growth across most segments, except the consumer end market. Seasonal factors and weaker gaming demand are expected to impact this segment, with a typical downturn in the fourth quarter that bottoms out in the first fiscal quarter before rebounding in the second.

“We project revenue growth to accelerate to 26% year-over-year growth at the midpoint of guidance,“ said CEO Matthew Murphy during the earnings call.

Retail investors polled on Stocktwits believe that Marvell has the best AI growth story right now, second only to Nvidia.

Stocktwits Poll on which semiconductor stock has the best AI story on Dec 4 as of 8:00 a.m. ET | Source: Stocktwits

“Stronger than forecast ramp in custom silicon was a key contributor to this performance,” said Murphy. He noted that custom silicon is also pivotal in advancing the company’s timeline to achieve its long-term target operating margin model.

The company has targeted a $40 billion total addressable market for custom silicon chips and aims to achieve a 20% market share.

Marvell Technology Inc. Sentiment and Message Volume on Dec 4 as of 7:55 a.m. ET | Source: Stocktwits

According to Stocktwits data, retail sentiment around the stock soared to year-highs of 97 in the ‘extremely bullish’ zone while message volume surged to ‘extremely high’, peaking at 96.

However, much of the chatter is focused on Murphy being considered a candidate for Intel CEO following Pat Gelsinger’s exit.

Analysts are largely bullish on Marvell, with several raising their price targets following the company’s earnings report. However, Morgan Stanley took a more cautious approach, citing the stock's high valuation and potential challenges in 2026 as reasons for its tempered outlook, despite near-term momentum from its partnership with Amazon Web Services (AWS).

Here’s a ranking of price target increases, starting with the most bullish:

JPMorgan: Price target raised to $130 from $90 with an ‘Overweight’ rating.
Wells Fargo: Price target raised to $130 from $110 with an ‘Overweight’ rating.
KeyBanc: Price target raised to $125 from $95 keeping an ‘Overweight’ rating.
Piper Sandler: Price target raised to $120 from $100 with an ‘Overweight’ rating.
Barclays: Price target raised to $115 from $85 with an ‘Overweight’ rating.
UBS: Price target raised to $115 from $110 with a ‘Buy’ rating.
Citi: Price target raised to $112 from $91 with a ‘Buy’ rating.
Morgan Stanley: Price raised to $102 from $82 with an ‘Equal Weight’ rating.