Shares of Marvell Technology (MRVL +6.33%), which makes data infrastructure semiconductors, soared 83.1% in 2024, according to data from S&P Global Market Intelligence. For context, that's more than triple the S&P 500 index's 25% return and nearly three times the tech-heavy Nasdaq Composite index's return of 29.6% last year. (In 2025, Marvell stock is down 3.5% through Friday, Jan. 10.)
In 2024, Marvell stock's big outperformance was primarily driven by powerful demand for artificial intelligence (AI) capabilities. The company's data center end market sells custom AI chips -- which are application-specific integrated circuits (ASICs) -- and interconnect products for AI-enabled data centers.
NASDAQ: MRVL
Key Data Points
Marvell stock had a relatively slow start to 2024 because of the company's non-AI business
In the first half of the year, Marvell stock gained 15.9%. Relatively speaking, this was just an average performance since it was in line with the S&P 500's first-half return of 15.3%.
Shares of AI chip king Nvidia skyrocketed 150% in this period. And shares of leading central processing unit (CPU) chip designer Arm Holdings surged 118% in the first half of the year, though ended the year with a 64.2% annual gain.
The key reason Marvell stock didn't perform as well as shares of select other chipmakers in the first half of 2024 is that the company has a good-sized non-AI-related business. And the end market for these chips has been struggling.
Marvell stock's marvelous AI-driven end to 2024
Through September, Marvell stock's year-to-date performance remained approximately in line with that of the broader market. It rose 19.6% over this period, compared with the S&P 500's 22.1% return.
Marvell stock performed fantastically in the fourth quarter of 2024. In this quarter, shares rocketed 52%, crushing the S&P 500's 2.4% return. The main catalyst for this incredible outperformance was the company's release of its report for the third quarter of its fiscal year 2025 (ended Nov. 2, 2024). Marvell stock soared 23.2% on the day after the Dec. 3 release.
Highlights from that quarterly report:
- Revenue grew 7% year over year to $1.52 billion, easily beating the 2% growth Wall Street had expected. More positively, revenue increased 19% from the prior quarter.
- Revenue in the AI-driven data center market skyrocketed 98% year over year to $1.10 billion, accounting for 72% of the quarter's total revenue.
- Revenue in the company's other end markets (enterprise networking, carrier infrastructure, consumer, and automotive/industrial) declined year over year, with declines ranging from 22% to 73%.
- Adjusted earnings per share (EPS) increased 5% year over year to $0.43, topping the 2% decline analysts had projected.
- Fiscal Q4 guidance for the top and bottom lines sped by Wall Street's estimates. Management expects revenue to grow 26% year over year and adjusted EPS to increase 17% to 39%.
Perhaps the best news in the earnings release was the comment from CEO Matt Murphy that the company expects its "substantial momentum to continue in fiscal 2026."
