Heading into this week's second-quarter report, Marvell Technology Group (Nasdaq: MRVL) shareholders needed armor-plated umbrellas because the sky was reportedly falling. Share prices had fallen more than 20% in 30 days as one cog after another in the mobile gadgetry machine started showing structural cracks.
Surely Marvell's fortunes couldn't be any stronger than those of competitors Texas Instruments (NYSE: TXN) and NVIDIA (Nasdaq: NVDA), or technology partner ARM Holdings (Nasdaq: ARMH). Right?
Wrong. Marvell shares jumped as much as 12.5% overnight because the company had some soothingly good news to share.
Driven by strong results across the mobile, networking, and storage markets, Marvell delivered sales and profits at the high end of management guidance.
Mobile chip sales were particularly strong in China, where Marvell has the early-bird advantage with a single-chip solution for the locally popular TD class of wireless standards. In enterprise networking, CEO Sehat Sutardja claims to be stealing market share at every major switch manufacturer from Cisco Systems (Nasdaq: CSCO) to Juniper Networks (Nasdaq: JNPR) and beyond, including design wins in several new switch products. And as Hitachi ramps up its newly acquired storage product lines from Western Digital (NYSE: WDC), Marvell is selling more drive controllers than expected as well.
In short, Marvell is a respectable four-star CAPS stock for a reason. As a leader in the storage and networking markets and a rising challenger in the mobile space, the company is positioned for terrific long-term growth -- as long as management continues to execute.
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