Why Marvell Stock Soared 83% in 2024

Core Insights - Marvell Technology's stock experienced an impressive 83.1% increase in 2024, significantly outperforming the S&P 500 and Nasdaq Composite indices, which returned 25% and 29.6% respectively [1] - The primary driver of this performance was strong demand for AI capabilities, particularly in the data center market where Marvell sells custom AI chips and interconnect products [1] Performance Overview - Marvell stock had a slow start in 2024, gaining only 15.9% in the first half, which was in line with the S&P 500's 15.3% return [2] - In contrast, competitors like Nvidia and Arm Holdings saw much higher gains of 150% and 118% respectively during the same period [2] - The underperformance in the first half was attributed to Marvell's significant non-AI business, which faced challenges [3] Fourth Quarter Highlights - Marvell stock surged 52% in the fourth quarter of 2024, outperforming the S&P 500's 2.4% return [5] - The catalyst for this surge was the release of the third-quarter fiscal year 2025 report, which led to a 23.2% increase in stock price the following day [5] - CEO Matt Murphy indicated that the company expects substantial momentum to continue into fiscal 2026 [5] Financial Performance - Revenue for the quarter grew 7% year over year to $1.52 billion, surpassing Wall Street's expectation of 2$1.10 billion, making up 72% of total revenue [6] - Other end markets experienced significant declines, ranging from 22% to 73% year over year [6] - Adjusted earnings per share (EPS) increased 5% year over year to $0.43, exceeding analysts' expectations of a 2% decline [6] - Fiscal Q4 guidance indicated revenue growth of 26% year over year and adjusted EPS growth of 17% to 39%, surpassing Wall Street estimates [6]