The COVID-19 outbreak has been unable to slow Marvell Technology Group's (NASDAQ:MRVL) momentum this year. This is clear from the chipmaker's fiscal first-quarter results for the period ended May 2.

Marvell's top and bottom lines in the recently concluded quarter blew past Wall Street's expectations, thanks to strong demand from the data center and 5G markets. What's more, the company's second-quarter guidance for $720 million in revenue represents a near double-digit bump compared to the prior-year period's revenue of $657 million.

Marvell expects adjusted earnings in the range of $0.17 to $0.23 per share, which is higher than the year-ago period's earnings of $0.16 per share at the mid-point. In all, the previous quarter's performance and the accompanying outlook indicate that Marvell could keep doing well despite the coronavirus pandemic.

But should you buy this tech stock considering that it has already gained over 30% this year? Let's take a closer look.

Person holding a 5G smartphone.

Image source: Getty Images.

Marvell is stepping on the gas thanks to 5G and data centers

Marvell's first-quarter revenue rose 4.7% year over year, while its non-GAAP net income increased just over 12%. As the guidance tells us, Marvell's top and bottom lines are expected to grow at a faster pace in the current quarter thanks to tailwinds in the networking business.

Marvell gets 57% of its revenue from the networking business. This segment is currently enjoying an uptick thanks to a jump in bandwidth demand on account of telecommuting and other activities such as online gaming and video streaming. Management pointed out on the latest earnings conference call that cloud service providers are "scrambling to add capacity to their networks." At the same time, enterprises are quickly upgrading their networks so their employees can work remotely.

Not surprisingly, the demand for Marvell's infrastructure processors that are used in data centers and wireless communications equipment is ticking up. In March, the company released its latest generation of OCTEON TX2 infrastructure processors to accelerate data center workloads. These processors can also be deployed in 5G base stations to increase network capacity.

These infrastructure processors are now being used by big data center customers such as Alphabet's Google, Amazon.com, and Oracle. Plus, Marvell claims to have landed another "large Tier 1 cloud customer" for this family of processors.

Meanwhile, Marvell's 5G business hasn't hit a speed bump in the wake of the coronavirus pandemic. The company is supplying solutions to two customers who have landed nearly half of the recent 5G contracts. Marvell has also started shipping its 5G products to Samsung and is currently in the process of getting its solutions qualified at Nokia with an aim of beginning production later this year.

In all, Marvell says it believes that it is "at the very beginning of the industry transition from 4G to 5G and look[s] forward to driving significant revenue growth from this end market."

On the other hand, Marvell's storage business took a hit last quarter as shelter-in-place orders in Southeast Asia disrupted its manufacturing operations. The company saw a double-digit sequential revenue decline in this business, worse than its expectation for a mid-single-digit decline. Marvell expects a turnaround in this business beginning this quarter.

Demand for Marvell's solid-state drive (SSD) controllers has started picking up the pace already. Shipments of the company's custom SSD controllers begun in the second quarter and this encouraged Marvell to call for a 10% sequential jump in storage revenue. However, Marvell anticipates it will take another quarter for the storage division to recover completely.

In all, Marvell's networking and storage businesses seem well-positioned to ride out the negative impact of COVID-19. But these aren't the only reasons why you may want to have this stock in your portfolio.

Some more reasons to go long

Marvell shares have shot up impressively in 2020, beating the broader market by a comfortable margin.

MRVL Chart

MRVL data by YCharts

However, the stock continues to remain cheap despite this rally. Its price-to-earnings (P/E) ratio of just 15.6 is significantly below the five-year average of nearly 48. What's more, Marvell's strong balance sheet indicates that it is well prepared to face any downturn.

The company had $668 million in cash at the end of last quarter, and it can access another $500 million from its undrawn revolving credit facility. Throw in the fact that the company continues to pay a decent dividend at a time when several dividend stocks have either reduced or suspended their payouts in the wake of the coronavirus pandemic, and investors have yet another reason to go long Marvell stock.