AI Chip Demand Surges! Another ASIC Giant Delivers Stellar Earnings, Shares Jump 14% Post-Market

Just a day after Broadcom reported strong results, another ASIC (Application-Specific Integrated Circuit) powerhouse delivered good news on Thursday. Marvell Technology released an impressive earnings report, with revenue guidance for the current quarter exceeding Wall Street expectations.

This indicates that Marvell and its peers are capitalizing on the rapid rise in ASIC demand as tech giants build out data centers. The news sent its shares surging over 14% in post-market trading.

Marvell Posts Robust Results

As corporate adoption of AI tools continues to climb, driving demand for specialized chips that power advanced data centers, ASIC designers like Marvell and Broadcom are reaping the rewards.

Big Tech companies—including Alphabet, Microsoft, Amazon, and Meta—are expected to spend at least $630 billion on AI infrastructure this year, which will significantly boost ASIC demand.

Financial results show that in the fourth quarter of the last fiscal year (ended January 31):

Marvell's revenue grew 22% year-over-year to $2.22 billion, slightly above the $2.21 billion expected by analysts (LSEG data);
Adjusted earnings per share were 80 cents, marginally beating the 79 cents expected by analysts;
Data center revenue, its largest business unit, grew 21% to $1.65 billion, slightly higher than the $1.64 billion analyst forecast.

For the first quarter of fiscal 2027, revenue is projected to be around $2.4 billion (plus or minus 5%), surpassing the analyst average estimate of $2.27 billion.

Matt Murphy, CEO of Marvell, stated in a release:

"We expect year-over-year revenue growth to accelerate each quarter throughout fiscal 2027, driven by continued strength in our data center business and a record-breaking pace of new orders."

Looking ahead, executives forecast that data center revenue could grow nearly 50% year-over-year in fiscal 2028, fueled by the expansion of AI infrastructure.

Optimism for the ASIC Market

Marvell and its primary competitor, Broadcom, are helping cloud computing firms design custom chips tailored to their specific data center workloads. This business is growing rapidly as hyperscalers seek alternatives to Nvidia’s general-purpose AI processors.

For Marvell, this trend represents a potential "dark horse" growth driver. The company is already involved in several custom chip projects related to cloud infrastructure, as the demand for these specialized chips is increasingly integrated into long-term data center investment plans.

On Wednesday, Broadcom stated that it expects AI chip sales to exceed $100 billion next year, indicating that its market share in the Nvidia-dominated sector is growing fast.

"Marvell’s stock, like many AI-related names, has underperformed the broader semiconductor industry over the past two quarters. We believe the stronger-than-expected results and outlook, while anticipated, provide more of a sentiment relief for investors," said Kinngai Chan, Senior Research Analyst at Summit Insights.