Strength Seen in Marvell (MRVL): Can Its 7.1% Jump Turn into More Strength?

Marvell Technology MRVL shares soared 7.1% in the last trading session to close at $81.74. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.1% gain over the past four weeks.

The optimism surrounding the stock is largely due to rising demand for Custom AI silicon XPU and Co-packaged optics solutions, AI-driven data center momentum and strong capital expenditure from hyperscalers. In the backdrop of these wins, Marvell Technology maintains strong market share in 800G PAM4 DSPs and is leading the transition to 1.6T solutions making investors confident about MRVL’s future prospects.

This chipmaker is expected to post quarterly earnings of $0.67 per share in its upcoming report, which represents a year-over-year change of +123.3%. Revenues are expected to be $2.01 billion, up 57.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Marvell, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MRVL going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Marvell is a member of the Zacks Electronics - Semiconductors industry. One other stock in the same industry, Applied Optoelectronics AAOI, finished the last trading session 4.4% lower at $23.06. AAOI has returned -4.9% over the past month.

For Applied Optoelectronics, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.08. This represents a change of +71.4% from what the company reported a year ago. Applied Optoelectronics currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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