Marvell Technology Inc Expected To Post Earnings Of 59 Cents A Share - Earnings

By Angela Palumbo

Semiconductor stocks have taken a hit this year, but one BofA Securities analyst remains optimistic about the sector's future.

Risks, including the implementation of tariffs and restrictions on exports of the most advanced artificial-intelligence chips, have semis under pressure. The PHLX Semiconductor Index, or the SOX, has dropped 6% this year.

But BofA Securities analyst Vivek Arya wrote in a note on Monday that it is common for the SOX to be volatile, and the current drop doesn't necessarily point to a long-lasting trend.

Last week, the index dropped 7.2%. Since the beginning of 2021 through the end of last week, the SOX has faced 21 separate 5% or more weekly declines, according to Dow Jones Market Data, while the S&P 500 has had only three instances of 5% or more weekly drops in the same time frame. However, from Dec. 31, 2020, through Feb. 28, 2025, the SOX has appreciated 71% while the S&P 500 has gone up 59%.

AI chip darling Nvidia — a member of the SOX — has been falling after the release of its quarterly results, even though they were better than expected. Despite this and the broader selloff, Arya is confident upcoming earnings from Marvell Technology and Broadcom could turn things around for the space.

"We expect beat/raise results from AVGO, MRVL...to re-energize interest in AI semis, since capex by U.S. cloud customers and sovereign AI investments remains the only dependable bright demand spot in the global economy," Arya wrote in a note on Monday.

Marvell is scheduled to report earnings on March 5 and Broadcom on March 6.

Arya isn't alone in his optimism. J.P. Morgan's Harlan Sur wrote on Sunday that he believes the fundamental setup is solid for Marvell and Broadcom, with both companies benefiting from "strong hyperscale capex spending."

Hyperscalers are large cloud service providers such as Alphabet, Microsoft, and Amazon.com. All of these companies have said they plan on spending tens of billions of dollars on AI this year, including for data center buildouts and other AI initiatives. Some of that spending has to go to hardware, benefiting companies such as Marvell and Broadcom.

Marvell sells a portfolio of chips and hardware products for data centers and AI infrastructure and helps big tech companies design their own AI semis. Broadcom also helps design in-house processors for big tech.

Arya is also confident in the potential long-term positive impact AI chatbots could have on chips. Some of these chatbots include OpenAI's ChatGPT, Alphabet's Gemini, DeepSeek, and Meta AI.

"The rise of chatbots in our view is a major positive for AI semis as it can drive continued strong demand for training and inference chips, drive new business models and applications, and reassure investors of return on investment on AI," Arya wrote.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

Marvell Technology, Inc. MRVL is likely to beat expectations when it reports fourth-quarter fiscal 2025 results after market close on March 5.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Marvell projects total revenues for the fiscal fourth quarter of $1.8 billion (+/- 5%). The Zacks Consensus Estimate for revenues is pegged at $1.8 billion, which indicates an increase of 26.5% from the year-ago quarter’s reported figure.

MRVL anticipates non-GAAP earnings to be 59 cents per share (+/- 5 cents) for the fourth quarter. The consensus mark for non-GAAP earnings has remained unchanged for the past 60 days at 59 cents, which calls for a 28.5% increase from the year-ago quarter.

In the trailing four quarters, Marvell’s earnings surpassed the Zacks Consensus Estimate thrice and matched once, with an average surprise of 3.8%.

Marvell Technology, Inc. Stock Price and EPS Surprise

Marvell Technology, Inc. price-eps-surprise | Marvell Technology, Inc. Quote

Earnings Whispers for Marvell

Our proven model predicts an earnings beat for MRVL this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (61 cents per share) and the Zacks Consensus Estimate (59 cents per share), is +2.77%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Marvell carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Influence Marvell’s Q4 Results

Marvell’s overall fourth-quarter revenues are likely to have benefited from improved performances across the majority of its end markets. The company’s data center division continues to be the primary engine of growth, benefiting from the rising demand for electro-optics products, custom artificial intelligence (AI) silicon and next-gen switches. Our model estimates suggest that fourth-quarter data center revenues will reach $1.36 billion, implying robust 23.5% sequential growth.

The growing adoption of 800-gig PAM products and 400ZR data center interconnect (DCI) solutions is fueling top-line expansion. Additionally, advancements in Compute Express Link technology and increased AI-related investments position Marvell as a key player in the high-performance computing ecosystem.

A major positive for the quarter is Marvell’s partnership with Microsoft, where its FIPS 140 Level-3 compliant liquid security hardware modules have been integrated into Azure Key Vault offerings. This strengthens Marvell’s footprint in cloud security and enterprise encryption, adding another layer of revenue diversification.

3Q25 Revenue Summary By End Market

Image Source: Marvell Technology, Inc.

Improved inventory corrections and recovering demand are helping Marvell’s Networking and Carrier segments rebound. Our projections indicate that Enterprise Networking and Carrier revenues will each rise by 16.8% sequentially, reaching $176.3 million and $98.3 million, respectively.

While carrier spending remains volatile, the company is benefiting from new design wins in cloud-driven networking solutions. As telecom providers upgrade their infrastructure for AI-driven applications, Marvell’s networking division should continue to see steady improvements.

The Automotive and Industrial divisions have been a consistent revenue contributor for Marvell, thanks to the increasing semiconductor content in vehicles and industrial automation growth. For the fourth quarter, our model estimates peg Automotive/Industrial revenues at $84.9 million, indicating a 2.4% sequential improvement. With automakers ramping up production of connected and electric vehicles, Marvell’s automotive ethernet solutions and advanced driver-assistance system (ADAS) technologies should continue to see steady adoption.

Despite the strength of Marvell’s data center, networking and AI segments, its consumer end market remains a weak spot. Seasonality in gaming and broader macroeconomic uncertainty may have resulted in a 15% quarter-over-quarter revenue decline to $82 million for this segment, as per our model estimates. Gaming demand typically weakens in the fourth quarter and bottoms out in the first quarter.

MRVL Stock Price Performance & Valuation

Year to date (YTD), Marvell shares have plunged 16.8%, underperforming the Zacks Electronics – Semiconductors industry’s decline of 9.2%. Comparing the stock’s performance with industry peers, MRVL has underperformed Cirrus Logic, Inc. CRUS, Lattice Semiconductor Corporation LSCC and Nova Ltd. NVMI.

YTD MRVL Stock Price Return Performance

Now, let’s look at the value Marvell offers investors at the current levels. Despite the recent fall, MRVL stock trades at a premium with a forward 12-month price-to-sales (P/S) multiple of 9.66X compared with the industry’s 7.45X.

MRVL Forward 12-Month P/S Ratio

Investment Consideration for MRVL

Marvell’s custom silicon business is a game-changer, particularly in the booming data center market. Cloud service providers rely on its highly specialized chips to optimize AI computing efficiency, networking speed and energy consumption.

In the third quarter of fiscal 2025, Marvell’s data center end market posted robust growth, driven by the rising adoption of AI-specific compute solutions. Management forecasts sequential revenue growth in the low-to-mid 20% range for the fourth quarter, a strong indicator of sustained AI-driven demand.

Additionally, Marvell is leading the charge in next-gen data center connectivity with investments in PCIe Gen 6 retimers and advanced interconnect technologies, ensuring faster and more reliable AI workloads. These advancements solidify Marvell’s role as a cornerstone of AI infrastructure, giving it a long-term competitive advantage.

Conclusion: Buy MRVL Before Q4 Results

Marvell’s upcoming quarterly results are likely to demonstrate the beginning of a multi-year growth story fueled by AI innovation. The company’s leading position in AI infrastructure, custom silicon and next-generation data center solutions make it a must-own stock for investors betting on the future of AI-driven computing.

While the stock trades at a premium valuation, its explosive growth prospects and strong financial execution more than justify the price. For those looking to ride the AI and semiconductor revolution, Marvell remains a top-tier investment.

This article originally published on Zacks Investment Research (zacks.com).

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US equity investors will focus on tariff announcements and nonfarm payrolls while tuning into monetary policy implications of the trade policy from Federal Reserve heavyweights on the speaking circuit this week.

* March 4 is the deadline for President Donald Trump to announce punitive import duties on China, Canada, and Mexico. The current situation is "fluid," and Trump will determine the level of tariffs, US Commerce Secretary Howard Lutnick reportedly said Sunday.

* "The Federal Reserve may have been preparing to ease rates, but this trade policy shift could force them to reconsider, a deVere Group note said late last week.

* Fed Chair Jerome Powell is among the top central bank officials delivering speeches this week after the March 4 tariffs announcements. Other policymakers speaking after that day include Atlanta Fed President Raphael Bostic, Fed Board Members Michelle Bowman and Adriana Kugler, and New York Fed President John Williams.

* The Fed speakers will also have the opportunity to share their views on the nonfarm payrolls report, which will likely increase by 156,000 in February following a 143,000 gain in January. The jobs report will offer the Fed another glimpse at the state of the labor market before the monetary policy announcements due March 19. There is a 93% probability that the Fed will leave interest rates unchanged this month, according to the FedWatch Tool early Monday.

* Other macroeconomic data investors will closely watch are ISM Manufacturing and ISM Services.

* Geopolitics will remain at the top of investors agenda following the diplomatic earthquake last week at the Oval Office, with a particular focus on how the European Union and the UK propose to end the Russia-Ukraine war while keeping the US on board and the minerals deal in play.

* Corporate earnings due this week include CrowdStrike , Marwell Technology , Broadcom , and Costco .

SoundHound AI SOUN incurred a fourth-quarter 2024 loss of 69 cents per share, wider than the year-ago quarter’s loss of 6 cents. The figure missed the Zacks Consensus Estimate by 527.27%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Revenues surged 101.5% year over year to $34.5 million, beating the Zacks Consensus Estimate by 3.14%. This growth was driven by major customer wins, expanded partnerships and advancements in generative AI. Strong adoption in quick-service restaurants, in-vehicle voice commerce and strategic acquisitions fueled this growth.

SOUN stock jumped 6.3% to $9.79 in the pre-market trading on Friday, driven by its raised 2025 guidance and strong revenue growth, signaling investor confidence in its expanding AI-driven business.

SoundHound AI, Inc. Price, Consensus and EPS Surprise

SoundHound AI, Inc. price-consensus-eps-surprise-chart | SoundHound AI, Inc. Quote

SOUN’s Operating Details

In fourth-quarter 2024, operating expenses were $291.6 million, higher than the year-ago quarter’s $29.5 million. The increase was primarily due to higher research and development, and general and administrative expenses, with acquisitions also playing a key role.

In the reported quarter, general and administrative expenses were $16.4 million (47.6% of the total revenues), skyrocketing 115.1% year over year.

In fourth-quarter 2024, research and development expenses were $20.4 million (59% of the total revenues), surging 60.4% year over year.

In the reported quarter, sales and marketing expenses were $9.6 million (27.7% of the total revenues), soaring 114.1% year over year.

The adjusted EBITDA loss widened to $16.8 million in the fourth quarter from $3.6 million in the year-ago quarter due to strategic acquisitions and growth investments across the business.

In the fourth quarter of 2024, the operating loss widened to $257.1 million from $12.4 million in the year-ago quarter.

SoundHound’s Q4 Business Highlights

In the fourth quarter of 2024, SOUN unveiled the first in-vehicle voice commerce platform at CES 2025, enabling voice-controlled food ordering. The event also highlighted key partnerships with NVIDIA, Perplexity, Lucid Motors, LG and top restaurant brands, showcasing its leadership in voice AI innovation.

SoundHound secured its largest deal of the fourth quarter in the energy sector, partnering with one of the largest electric utilities in the United States. This expansion strengthens its diverse customer portfolio and marks a significant entry into a new industry.

SOUN recently announced a partnership with Rekor, a leader in roadway intelligence technology, to develop a first-of-its-kind audio-visual AI, enabling hands-free voice control for emergency vehicle technology.

SoundHound is leading the Agentic AI revolution, leveraging its proven platform and strong market position to deliver next-generation capabilities that shape the future of AI functionality for its customers.

SOUN’s Balance Sheet

As of Dec. 31, 2024, cash and cash equivalents were $198.2 million compared with $135.6 million as of Sept. 30, 2024.

In the fourth quarter, the company fully repaid the remaining outstanding debt from the acquisition, closing 2024 with a debt-free balance sheet.

SoundHound Raises FY25 Guidance

The company forecasts 2025 revenue between $157 million and $177 million, indicating year-over-year growth of 97%.

SOUN’s Zacks Rank & Stocks to Consider

SoundHound currently carries a Zacks Rank #3 (Hold).

Okta OKTA, CrowdStrike CRWD and Marvell Technology MRVL are some better-ranked stocks in the broader sector.

Okta flaunts a Zacks Rank #1 (Strong Buy) at present, and CrowdStrike and Marvell Technology (MRVL) carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Okta shares have gained 13.2% year to date. OKTA is set to report fourth-quarter fiscal 2025 results on March 03.

CrowdStrike’s shares have gained 11.6% year to date. CRWD is scheduled to release fourth-quarter fiscal 2025 results on March 04.

Marvell Technology’s shares have declined 20% year to date. MRVL is set to report third-quarter fiscal 2025 results on March 05.

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research