Marvell Technology Group (NASDAQ:MRVL) stock has been on fire this year, even though its business has not been in the best shape. The company's earnings have gone south for five straight quarters, while the top line has decelerated for two quarters in a row.

Marvell's recently released fiscal 2020 third-quarter results reaffirm that the company is having difficulty in navigating the weak semiconductor demand environment this year. Its revenue dropped 22% year over year, and losses increased. But Wall Street continues to remain upbeat about Marvell's prospects despite the headwinds.

MRVL Chart

MRVL data by YCharts.

Investment banking firms Cowen and Jefferies have raised their price targets on Marvell stock. They believe that the company is poised to take advantage of the global 5G (fifth generation) network rollout. But will the 5G catalyst prove big enough for Marvell and help it offset the other headwinds?

Marvell's 5G opportunity

Marvell Technology gets its revenue from two segments -- networking and storage. The networking business has grown stronger over time and now accounts for half of the chipmaker's total revenue. This means that 5G is going to play an influential role in determining Marvell's future growth, given the size of the end-market opportunity and the steps the company is taking to take advantage of the same.

In February this year, Marvell released a family of end-to-end solutions for the 5G market. As a result, it was able to score multiple design wins in the 5G base station and ethernet-switching markets, among others. The good news is that Marvell has already begun shipping 5G chips to one of its customers. CEO Matt Murphy pointed this out on the latest earnings conference call: "In fact, one of our important growth drivers has already started to benefit us and I'm very pleased that we shipped a significant amount of our 5G products in the third quarter, helping our key customer rapidly rollout base stations for the initial wave of 5G deployments in [South] Korea."

Hand drawing an arrow that keeps going up.

Image Source: Getty Images.

Marvell anticipated the ramp-up would begin in the fourth quarter, which means that the 5G catalyst has kicked in earlier. As a result, demand for Marvell's embedded processors grew in the double digits over the previous quarter. This helped the chipmaker offset the seasonal decline in demand for its Wi-Fi products, as evidenced by the fact that Marvell's wireless revenue remained flat quarter over quarter.

The company anticipates its Korean 5G business will gain more steam over the next couple of quarters, though this is not the only catalyst the company is relying on. The chipmaker says that its 5G revenue could gain strong momentum from the second half of the next fiscal year as demand for base stations increases in Japan and the U.S.

This means that Marvell expects to gain traction in all three markets that are leading the deployment of 5G networks. But investors should note that 5G networks won't be restricted to only these three markets. As a result, demand for base stations is expected to take off rapidly on a global scale.

According to a third-party estimate, global base station demand is expected to clock a compound annual growth rate of over 50% from 2019 through 2025. Marvell seems well placed to take advantage of this rapid growth as it's been nimble enough to launch 5G products before deployments gained critical mass.

Storage will get a nice shot in the arm

Marvell's storage business showed signs of life last quarter, recording sequential growth of 5%. The company credits this to an improvement in the data-center market and expects the trend to continue in the coming quarters.

The good news for Marvell is that the data-center market could be another beneficiary of the 5G rollout, as the impending data boom will create the need for more storage capacity and low latency to enable rapid data transfer. This is where solid-state drives (SSDs) will come into play as they fit the criteria that data centers are going to need.

The SSD market is expected to expand at an annual rate of nearly 15% through 2024, according to Mordor Intelligence. This opens up a secular growth opportunity for Marvell's SSD storage controllers and storage processors. Gartner estimates that data-center spending is expected to grow 2.6% next year after declining an estimated 2.5% in 2019, indicating that the storage business could sustain its recent growth well into 2020.

In the end, Marvell is expected to stage a nice comeback in the next fiscal year, thanks to 5G. This is evident from a compilation of analyst estimates by Yahoo! Finance that projects 15.7% top-line growth at Marvell in fiscal 2021 as compared to an estimated 5.7% drop in the current one.

This is why it would be a good idea to keep holding Marvell Technology, as it could very well remain a growth stock next year.