Marvell Technology’s (NASDAQ: MRVL) stocks soared phenomenally in 2024, surging 83.1%, according to S&P Global Market Intelligence. This was more than three times the S&P 500’s return of 25% and far outpaced the Nasdaq Composite’s 29.6% gain. Primarily, it was driven by an explosion in demand for artificial intelligence capabilities, particularly in the data center market, that centralizes Marvell’s business. However, Marvell stock is down 3.5% as of January 10, 2025.
A Slow Start to 2024
Marvell stock was a big winner overall in 2024, but its first half was relatively tame. The stock rose 15.9%, matching the S&P 500’s 15.3% return over the same period. That trailed other semiconductor players, including Nvidia, which rocketed 150%, and Arm Holdings, which shot up 118% before ending the year with a 64.2% gain.
The reason for Marvell’s slower growth in early 2024 lies in its non-AI business segments. While AI demand was surging, other markets for Marvell’s chips—such as enterprise networking, carrier infrastructure, and consumer electronics—faced significant headwinds, limiting overall performance.
Marvell Stock’s Remarkable Q4 Rally
The real turning point for Marvell stock came in the fourth quarter of 2024 when shares rocketed 52%, dwarfing the S&P 500’s 2.4% return during the same period. A key catalyst was the company’s stellar third-quarter fiscal 2025 earnings report, released on December 3, 2024.
Highlights of this report include:
- Revenue Growth: Revenue climbed 7% from last year to $1.52 billion, crushing a consensus expectation that revenue would only be 2% better year-over-year. The sequential improvement in revenue came in at a remarkable 19%.
- AI Rules the Market: AI-powered data center revenue climbed an incredible 98% compared with the year ago period and hit $1.10 billion or 72% of quarter revenues.
- Other Market Duds: Enterprise networking and automotive/industrial each experienced 22% to 73% drops year over year in revenue.
- EPS Growth: Adjusted earnings per share (EPS) jumped 5% year over year to $0.43, beating analysts’ expectations of a 2% decline.
Marvell’s management said it expects strong fiscal Q4 growth, with revenue expected to jump 26% year over year and adjusted EPS up 17% to 39%. CEO Matt Murphy added to investor optimism by saying the momentum will continue into fiscal 2026.
Why AI is Fueling Marvell’s Growth
Marvell’s ability to cash in on the AI boom is based on its specialized products designed for AI-enabled data centers. The company provides custom AI chips, such as ASICs, and interconnect solutions tailored to optimize AI operations. By focusing on AI-related technology, Marvell positioned itself to take full advantage of the continued expansion of AI applications across industries.
Should Investors Buy Marvell Stock After It Soared Over 83%?
Despite its stunning performance in 2024, Marvell Technology is not perhaps a top buy for all investors. For instance, the Stock Advisor team from The Motley Fool has actually identified other stocks they believe carry higher long-term growth potential. However, due to its prime positioning in the AI-driven semiconductor market and its amazing recent performance, Marvell seems to be quite an attractive opportunity for those looking to enter the AI space.
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