Marvell shares rose 18% in premarket trading after Nvidia CEO Jensen Huang said the chip designer could become the next trillion-dollar company.
Marvell Technology shares jumped 18% in premarket trading Tuesday after Nvidia CEO Jensen Huang hailed the chip designer as a future trillion-dollar company, citing its role in the build-out of artificial intelligence infrastructure.
Huang made the remarks during an onstage appearance with Marvell CEO Matthew Murphy at Computex Week in Taipei on Monday. His comments drew attention to a part of the AI hardware market that has become increasingly important as data centers rely on large numbers of connected chips to handle demanding computing workloads.
Marvell is set to be the “next trillion-dollar company,” Huang said, according to CNBC. He pointed in particular to networking and connectivity chips that help data move quickly across massive data-center systems.
“When you take a computing problem, and you disaggregate it into a lot of parts, and you distribute it across the entire data center, what's necessary is connectivity,” Huang said. “That's the reason why Matt's doing so well. That's the reason why Marvel is so essential.”
Marvell designs high-performance chips used across global data infrastructure, including cloud computing, AI, enterprise networking, 5G carrier networks and automotive systems. The company’s position in data-center connectivity has made it a closely watched name as investors track the companies supplying the broader AI stack beyond graphics processors.
The company reported first-quarter revenue of $2.4 billion in May, beating analyst estimates, and forecast continued revenue growth for the fiscal year, helped by strength in its data-center business.
Nvidia has also recently committed to a $2 billion investment in Marvell. The company is investing billions more in firms developing photonics technology, which uses light to transmit data and is described as more efficient than moving data with electricity.
Huang’s endorsement does not by itself determine whether Marvell can reach a trillion-dollar valuation. The next test for investors will be whether data-center demand and Marvell’s revenue growth can keep pace with the expectations now being placed on the company.
Comments (0)