(Bloomberg) — Marvell Technology Inc. jumped in late trading after the chipmaker delivered better-than-expected results and optimistic profit forecasts, citing demand for artificial intelligence.
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Third-quarter profit amounted to 43 cents per share, excluding some items, the company said in a statement on Tuesday. That was better than the average analyst estimate of 41 cents. On that basis, Marvell expects a profit of as much as 64 cents in the current period, well above the projection of 52 cents.
Chief Executive Officer Matt Murphy has positioned the chipmaker to benefit from an industry-wide increase in AI spending. While it doesn't sell the highly regarded AI accelerators that Nvidia Corp. the most valuable company in the world, Marvell offers other components used by cloud computing providers to develop advanced services.
“The exceptional performance in the third quarter and our strong guidance for the fourth quarter are primarily due to our custom AI silicon programs, which are now in volume production,” Murphy said in the statement.
Shares rose nearly 9% to $104.35 in extended trading after the results were announced. They were up 59% this year through Tuesday's close.
Marvell expects revenue of about $1.8 billion in the fourth quarter, which runs through January. That compares to a median estimate of $1.64 billion, according to data compiled by Bloomberg. Revenue rose 7% to $1.52 billion in the third quarter, ahead of forecasts of $1.45 billion.
Murphy, who became CEO in 2016, is now a potential candidate to take over Intel Corp. to lead. That company has approached the director as part of its search for a new leader following the ouster this week of Intel CEO Pat Gelsinger, Bloomberg News reported Tuesday.
(Updates with more results in the sixth paragraph.)
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