Marvell announced its second-quarter financial results, driven by the continuous growth in infrastructure investment from AI. As a result, demand for the company's networking, interconnection, and custom chip products increased, leading to another record-breaking quarter in revenue. However, this set of results did not continue to drive the stock price to maintain its strong performance seen so far this year.

Second-quarter revenue exceeded expectations.

Financial reports show that Marvell achieved revenue of $2.739 billion in the second fiscal quarter, a year-on-year increase of 37%, which is higher than the company's previous guidance of $2.7 billion. Calculated according to U.S. Generally Accepted Accounting Principles (GAAP), the net profit was $308 million, resulting in an earnings per share of $0.33 after dilution; the adjusted earnings per share were $0.94.

The company's operating cash flow for the quarter was $605.5 million, and its overall performance continued to benefit from the order growth brought about by the infrastructure construction related to AI.

Data center revenue accounts for 79%

Data center business revenue for the current quarter increased by 46% year-on-year, reaching approximately $2.17 billion, accounting for 79% of total revenue. Communications and other business revenue also increased by 10% year-on-year, to $567.8 million.

This revenue structure indicates that Marvell is further transforming into an infrastructure provider for AI. As the expansion of data centers continues, the role of network chips and custom chips in AI computing systems is on the rise.

Third-quarter outlook continues to be raised

Marvell expects revenue in the third fiscal quarter to reach $3.15 billion, with a margin of plus or minus 5%, which is higher than Wall Street's consensus forecast of around $3.03 billion. The company anticipates an adjusted earnings per share of $1.10, with a margin of plus or minus $0.05, also exceeding analysts' estimate of about $1.07.

Prior to this, Nvidia's latest financial report also reinforced the market's belief that AI will continue to expand its investment in computing power. For Marvell, the focus going forward is to convert existing orders and custom chip collaborations into sustained revenue growth. The company expects to provide further details on its medium- to long-term business plans during the investor day event on October 6th.