Just last month, I wrote about why Marvell Technology Group (MRVL -0.62%) stock looked like a terrific buy despite logging impressive gains in 2021. The chipmaker's fiscal 2022 third-quarter results, released on Dec. 2, offer up some fresh support for my assertions that this hot stock is headed higher.

It appears I'm not the only one who thinks so, as Marvell's stock price shot up 17% after the release of its latest quarterly report which registered outstanding growth in revenue and earnings that helped it crush Wall Street's expectations.

Let's look at the numbers from Marvell's third-quarter report and see how it adds to the argument that this stock's explosive run isn't over yet.

A rocket taking off above the clouds.

Image source: Getty Images.

Marvell Technology delivers terrific growth

Marvell Technology's fiscal Q3 revenue shot up 61% year over year to $1.21 billion, driven by substantial growth across all five of its end markets. Analysts were looking for $1.15 billion in revenue from Marvell, but the robust demand for chips from the data center, telecom, networking, consumer, and auto/industrial markets helped it exceed expectations.

The chipmaker's non-GAAP net income increased to $0.43 per share in the quarter from $0.25 per share in the year-ago period. The bottom line easily exceeded consensus estimates of $0.38 per share. The sharp year-over-year jump of 72% in Marvell's earnings per share was aided by an increase of 2.1 percentage points in the adjusted gross margin to 65.1% during the quarter.

It is worth noting that Marvell's acquisitions of Inphi and Innovium, completed in April and October this year, provided a substantial boost to the company's results. However, Marvell's organic business that excludes these acquisitions also did well, recording nearly 30% year-over-year growth during the quarter. It is also impressive to see that the new acquisitions are enhancing the company's margins and improving its earnings power, as is evident from the jump in its margins last quarter.

The good part is that Marvell's terrific momentum shows no signs of ending, as its guidance indicates. The company anticipates $1.32 billion in revenue this quarter along with earnings of $0.48 per share at the midpoint of its guidance range. The forecast is well ahead of Wall Street's expectation of $0.42 per share in earnings and $1.21 billion in revenue.

For comparison, Marvell had reported $0.29 per share in earnings on revenue of $798 million in the year-ago period, which means that it is on track to sustain its terrific performance once again.

More growth is in the cards

Marvell CEO Matt Murphy pointed out on the latest earnings conference call that the company is seeing a sharp spike in demand for chips used in the fifth-generation (5G) wireless networks. More specifically, Marvell's 5G business is expected to increase 30% sequentially in the fourth quarter, driven by the ramp-up of new products featuring the company's chips.

Marvell points out that it is going to witness a substantial increase in revenue thanks to the new design wins it has scored in the data center and 5G markets. In the words of the CEO:

We updated our expectations for revenue from cloud-optimized silicon design wins to ramp to $400 million in fiscal 2024, a year earlier than prior projections. These wins are further projected to double to $800 million in revenue in fiscal 2025. In 5G, starting in fiscal 2024, we expect to benefit from an increase in content at Nokia when we start ramping our 5-nanometer OCTEON-embedded processors into their 5G base station.

The ramp-up of the 5G business will positively affect the company's revenue from the carrier infrastructure business. This segment accounted for 18% of Marvell's top line last quarter and recorded a 27% year-over-year jump in revenue. The company now anticipates year-over-year growth of 40% in the carrier infrastructure business thanks to the 5G ramp.

Meanwhile, Marvell's biggest business has also hit a purple patch thanks to the acquisitions and the increasing adoption of its chips. The data center segment produced 41% of Marvell's total revenue last quarter at nearly $500 million, growing 109% over the prior-year period. Just like the 5G business, Marvell says that the data center business is also witnessing "the start of new product ramps, which we expect will continue to drive sustained growth."

As a result, Marvell says that its data center business is on track to double once again in the current quarter as compared to the prior-year period.

Meanwhile, the automotive/industrial end market is turning out to be another growth hotspot for Marvell. Though the segment produced just $66 million in revenue last quarter -- just over 5% of the top line -- it recorded 114% year-over-year growth. The important thing to note here is that the segment's growth was organic in nature and wasn't powered by the acquisitions, as was the case with other segments.

Marvell credited this impressive growth to the faster adoption of its automotive chips by OEMs (original equipment manufacturers), and it sees a massive opportunity in this space going forward. The company expects the cloud, 5G, and automotive end markets to generate a revenue opportunity of $18.9 billion by 2024, up from this year's estimated $10.9 billion.

The company's overall addressable opportunity is expected to hit $30 billion by 2024, indicating that it has a lot of room to grow as it is on track to clock just over $4.4 billion in revenue this fiscal year.

The stock remains a screaming buy

Marvell's lucrative end markets explain why analysts expect the company's bottom line to clock a compound annual growth rate of 43% for the next five years. The huge addressable market also points toward robust top-line growth in the coming years.

Chart showing rise in Marvell's revenue estimates over the next two fiscal years.

MRVL Revenue Estimates for Current Fiscal Year data by YCharts

Given that Marvell stock is trading at just 22 times trailing earnings despite such impressive growth, it looks like an ideal bet for investors looking to buy a growth stock at a reasonable valuation.