Buy the Spike in Marvell Technology Stock After Q3 Earnings?

Core Insights - Marvell Technology (MRVL) exceeded Q3 expectations and announced the acquisition of Celestial AI, leading to a significant stock price increase [1][5][11] Financial Performance - Marvell reported record Q3 sales of $2.07 billion, surpassing estimates of $2.06 billion, representing a 37% increase from $1.51 billion in the same quarter last year [5] - Q3 EPS was $0.76, exceeding expectations of $0.75 and showing a 77% increase from $0.43 per share a year ago [5] Future Guidance - Marvell provided optimistic guidance for Q4 sales, projecting around $2.2 billion ±5%, with Zacks estimates at $2.15 billion, indicating 18% growth [6][8] - Full-year revenue growth is expected to exceed 40%, aligning with consensus estimates of $8.12 billion or 41% growth [8] Acquisition Details - The acquisition of Celestial AI is valued at $3.25 billion, potentially rising to $5.5 billion if revenue milestones are met, and is expected to close in the first half of 2026 [3][4] - Celestial AI specializes in advanced photonic interconnect technology, which will enhance Marvell's competitiveness in the AI infrastructure market [4] Valuation Metrics - Marvell's stock is trading at a forward P/E multiple of 32X, which is reasonable compared to the industry average and a discount to its 5-year median of 53X [9]