What happened

Shares of Marvell Technology Group (NASDAQ:MRVL) gained 15.1% in August, according to data from S&P Global Market Intelligence. The surge was driven by a stellar second-quarter earnings report, and the stock has now soared 43% higher over the past 52 weeks.

So what

The maker of storage and networking controller chips saw sales rising 1% year over year in the second quarter, stopping at $605 million. On the bottom line, adjusted earnings jumped 67% higher to land at $0.30 per share. Analysts were only looking for earnings of $0.28 per share on revenues near $601 million. Share prices rose more than 10% higher the next day and haven't looked back since then.

Clean-room technician holding up a semiconductor in a pair of tongs.

Image source: Getty Images.

Now what

Marvell is emerging from a legacy cocoon of hard drive controller sales and legacy networking orders into a new business model where SSD storage devices and high-speed networking are driving the truck. The shifting product mix is widening Marvell's gross margins with cascading benefits further down the income statement. Management is paying special attention to Chinese storage and networking customers at the moment, but North American clients have also been holding their own.

In short, Marvell is defending its market positions in the storage and networking sectors while also building future growth in the budding automotive computing industry. As long as management continues to execute, I find it easy to endorse Marvell's stock even after a strong bull rush like the current surge. This stock is going places in the long run.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.