Marvell Technology forecast second-quarter revenue above Wall Street estimates on Thursday, betting on strong demand for its custom chips powering artificial intelligence workloads in data centers.
Demand for custom AI chips continues to fuel growth, while networking chips and electro-optics have also seen robust order momentum. These advancements help hyperscalers seeking to scale their infrastructure to support AI workloads.
Marvell said in its post-earnings call that it expects AI tailwinds to remain strong, driven by robust hyperscaler spending, new sovereign data center projects, and the expansion of emerging market players expanding the market, opening up growth opportunities.
Revenue from Marvell’s data center segment, which accounts for 76 per cent of the company’s total revenue, stood at $1.44 billion in the first quarter.
The company’s carrier and enterprise networking segments have also gradually recovered following a period of inventory correction.
“We believe the custom silicon business will be the primary growth driver over the next 3-5 years, contributing positively to operating profits despite lower gross margins,” said Angelo Zino, analyst at CFRA Research.
Zino added that the upcoming custom silicon webinar on June 17 could serve as a catalyst by potentially showcasing TAM expansion opportunities and new customer wins in CY26.
However, the consumer end market remained weak for the company, with revenue falling 29 per cent sequentially to $63.1 million due to seasonality in gaming demand. The industrial segment also struggled, reporting a 12 per cent sequential decline in revenue.
Shares of the company fell about 2 per cent in extended trading.
The company expects second-quarter revenue to be $2 billion, plus or minus 5 per cent compared with analysts’ average estimate of $1.98 billion, according to data compiled by LSEG.
In May, Marvell said it was postponing its previously scheduled investor day conference due to a “dynamic macroeconomic environment.”
It reported revenue of $1.9 billion for the quarter ended May 3, compared to analysts’ average estimate of $1.88 billion.
