Marvell Technology Inc. (MRVL) shares surged 5.18% in pre-market trading on Monday, following reports of increased demand for artificial intelligence (AI) chips and positive sentiment surrounding the semiconductor industry.
The pre-market rally comes ahead of a potential boost for Marvell and other chipmakers from Microsoft Corp.'s (MSFT) plans to invest $80 billion in developing AI-enabled data centers and deploying AI and cloud-based applications in the fiscal year 2025. According to a report by Reuters, Microsoft's investment is seen as a positive for the semiconductor sector, as it removes the risk of a cut in capital expenditure.
Marvell Technology, a leading provider of data infrastructure semiconductor solutions, is well-positioned to capitalize on the growing demand for AI chips. The company's data center business, which now accounts for 72.6% of its revenue, grew a staggering 98% in the last quarter, driven by its custom ASIC (Application-Specific Integrated Circuit) offerings for AI applications.
