Chipmaker Marvell Technology expects AI revenue to double this year

Bengaluru – Marvell Technology on Thursday forecast that its artificial intelligence (AI) revenue will double for the year, becoming the second United States chip company in as many days to bet on the breakthrough technology.

Shares of Marvell rose 17.2 per cent to US$57.96 in extended trading on Thursday as the chipmaker also surpassed Wall Street targets for first-quarter revenue, a day after bigger peer Nvidia announced a quarterly revenue target that is more than 50 per cent above market estimates.

“Generative AI is rapidly driving new applications and changing investment priorities for cloud customers,” Marvell chief executive officer Matt Murphy said in a post-earnings conference call.

Chip investors are piling money into companies with AI growth prospects. A rosy forecast by Nvidia helped send its market value past US$930 billion (S$1.26 trillion) on Thursday and lifted shares of other providers of semiconductors and AI technology.

OpenAI-owned chatbot ChatGPT’s rapid success has prompted tech giants such as Alphabet and Microsoft to make the most of generative AI – which can engage in human-like conversation and craft everything from jokes to poetry.

This has, in turn, boosted demand for the chips that power AI technology, benefiting companies such as Marvell.

Marvell’s AI revenue will at least double again in 2024 and “and continue to grow rapidly in the coming years”, Mr Murphy said, with second-quarter cloud revenue expected to grow 10 per cent sequentially.

The California-based firm also forecast a second-quarter revenue of US$1.33 billion, above analysts’ estimates of US$1.31 billion, according to Refinitiv data.

Excluding items, it reported revenue of US$1.32 billion for the quarter ended April 29, beating expectations of US$1.3 billion. REUTERS