Marvell Technology Group (MRVL -0.70%) succumbed to the semiconductor industry's weakness and slashed its fourth-quarter outlook in early February. But that hasn't dented investor confidence, as the stock has continued its upward trajectory, rising nearly 23% so far in 2019.

That's definitely surprising, considering the negative sentiment around semiconductor stocks over the past year. But Marvell investors don't seem to be bothered about the near-term results, and are probably expecting huge gains from fifth-generation (5G) wireless networks. Investors will want to see tangible gains on this front when the company releases its fiscal fourth-quarter results on March 7.

Man looking up at a group of question marks over his head

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The 5G promise

Marvell's most recent guidance suggests that it will deliver fourth-quarter revenue between $735 million and $745 million. The company was originally expecting $790 million to $830 million in revenue for the quarter, but lower spending on cloud infrastructure and the shortage of PC central processing units (CPUs) hurt demand for its storage-controller products.

But Marvell did point out that demand for its networking processors remains strong, thanks to 4G wireless network upgrades and early 5G infrastructure deployments. The company also forecasts an improvement in demand in the latter part of the year, once inventory adjustments at its customers are over and capital spending starts gathering momentum.

Moreover, Marvell looks all set to jump onto the 5G bandwagon in a big way later in 2019, when it releases its base station products. The company was already shipping embedded processors for 5G infrastructure trials, according to the last update, while adding new Tier 1 customers that could go on to deploy its 5G chips.

In fact, Marvell says it has already scored a "significant design win for our full 5G solution with a leading base station customer." All this positive talk has given Marvell immunity from the guidance cut that it announced a few weeks back.

Check out the latest earnings call transcript for Marvell Technology Group.

Gauging the outlook

The good news for Marvell is that its networking business, which supplies 47% of revenue, is witnessing strong momentum. Revenue from this business was up 57% annually during the third quarter, though such impressive growth can be attributed to the Cavium acquisition, completed in July last year.

So the year-over-year comparisons in Marvell's networking business will remain favorable this time as well. But more importantly, the 5G catalyst is expected to move closer to fruition as the company sees deployments picking up the pace in the new fiscal year that has just begun.

Management clarified in December that the shipment of embedded 5G processors will witness "larger rollouts in the next year," so Marvell is probably just a quarter or two away from witnessing a meaningful bump in 5G-related shipments. However, it won't be surprising to see an early ramp-up; other chipmakers such as Xilinx and Qorvo have already reported an improvement in 5G-related spending in their latest quarterly reports.

So, Marvell has the capability of springing a positive surprise as far as guidance is concerned, thereby setting the stage for more upside post-earnings.