What Happened?
Shares of networking chips designer Marvell Technology (NASDAQ: MRVL) jumped 5.8% in the afternoon session after Amazon announced robust demand for its Trainium processors, which are manufactured by Marvell. The update came from Amazon CEO Andy Jassy, who highlighted an impressive 150% quarter-over-quarter growth for the Trainium2 chip. This rapid expansion turned the processor line into a multibillion-dollar business for Amazon. As the manufacturer of these specialized chips, the strong demand directly pointed to a significant business opportunity for Marvell. The announcement suggested a substantial boost in revenue from a key customer, giving investors confidence in the chipmaker's growth prospects.
After the initial pop the shares cooled down to $92.61, up 4.6% from previous close.
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What Is The Market Telling Us
Marvell Technology’s shares are extremely volatile and have had 39 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 18 days ago when the stock gained 4.6% on the news that analysts at UBS raised their price target on the stock, while the broader semiconductor sector also experienced a rally. UBS adjusted its price target for Marvell Technology to $105 from $95, maintaining a "Buy" rating. This positive analyst action came as the company reported strong revenue growth, which was driven by the increasing demand for data centers tailored for artificial intelligence (AI). Adding to the upbeat sentiment, the entire semiconductor industry rebounded amid general market strength. This followed encouraging comments regarding China trade relations and news of a significant AI chip partnership between OpenAI and Broadcom, which lifted investor confidence across the sector.
Marvell Technology is down 18.4% since the beginning of the year, and at $92.61 per share, it is trading 26.5% below its 52-week high of $126.06 from January 2025. Investors who bought $1,000 worth of Marvell Technology’s shares 5 years ago would now be looking at an investment worth $2,510.
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