:max_bytes(150000):strip_icc()/GettyImages-2169879324-adcafaf51b04442c86db89f861be27cf.jpg "This Semiconductor Stock Is Surging After an AI Deal and Strong Earnings")
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Key Takeaways
- Marvell Technology reported a quarterly profit ahead of analyst’ estimates, thanks in part to strong data center demand.
- The semiconductor company also said it is acquiring Celestial AI in a $3.25 billion deal.
Marvell Technology (MRVL) shares jumped Wednesday after the semiconductor company topped profit estimates on strong data center demand and announced an AI acquisition.
The shares were up close to 5% in recent trading, making Marvell one of the best-performing stocks in the Nasdaq Wednesday. (Read our daily markets coverage here.)
Marvell posted adjusted earnings of $0.76 per share for the third quarter of fiscal 2026, slightly above the analyst consensus compiled by Visible Alpha. Revenue was in line with estimates at $2.07 billion.
Marvell CEO Matt Murphy said the company saw strong demand for its data center products in the quarter, and expects full-year revenue growth north of 40% compared to fiscal 2025. Murphy said in Tuesday’s earnings call that Marvell’s revenue is projected to grow at least 10% in fiscal 2027, while revenue from its data center products could surge more than 25%, according to a transcript provided by AlphaSense.
Marvell also announced a deal to acquire Celestial AI for $3.25 billion in cash and stock, with another $2.25 billion in potential stock awards if Celestial hits certain revenue milestones in the next several years. The deal is set to close in the first quarter of next year, with Celestial AI to meaningfully contribute to revenue by the back half of fiscal 2028.
Why This Is Significant
Marvell stock’s pop Wednesday could be taken as another sign of confidence in the flagging AI trade, and the semiconductor firm’s place in the industry.
Bullish analysts at Oppenheimer, who hold an “outperform” rating for Marvell stock, raised their target to a new Street high of $150 from $115 following the announcement, citing optimism about the Celestial AI acquisition.
Despite Wednesday’s gains, Marvell’s stock has lost about 12% for 2025 after a hit earlier in the year amid some concerns about its outlook.
