May 27 (Reuters) – Marvell Technology forecast quarterly revenue above estimates on Wednesday, signaling strong demand for its networking and custom silicon chips used in the AI data center buildout.
Shares of the Santa Clara, California-based company, rose over 6% in extended trading. They have more than doubled so far this year.
The surge in AI adoption has fueled demand for specialized chips, particularly Marvell’s custom AI processors, which are gaining traction as a cost-effective alternative to Nvidia’s expensive offerings.
These chips, along with Marvell’s interconnect technologies, play a critical role in advanced data centers by linking thousands of processors used to train and run AI models.
Marvell expects revenue of $2.70 billion for the second quarter, plus or minus 5%, compared with the analysts’ average estimate of $2.60 billion, according to data compiled by LSEG.
Adjusted profit is expected to be 93 cents per share, plus or minus 5 cents, above estimates of 90 cents apiece.
Marvell and larger rival Broadcom help cloud-computing companies design custom chips tuned to their specific data center needs, and that work has grown into a large business for both companies.
The company has been a key beneficiary of surging capital spending by hyperscalers, who use its technology for high-speed connectivity inside data centers.
U.S. tech giants, including Alphabet and Amazon are expected to spend more than $700 billion on AI infrastructure this year, a sharp rise from around $400 billion in 2025.
In the first quarter, Marvell’s revenue rose 28% to $2.42 billion, beating estimates of $2.40 billion. Adjusted profit came in at 80 cents per share, exceeding estimates of 79 cents.
(Reporting by Anhata Rooprai in Bengaluru; editing by Alan Barona)
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