Why Marvell Stock Popped Today
Key Points
Marvell's CEO said the company is the "Switzerland" of the entire semiconductor industry because it works with everyone.
Investors no longer seem concerned about rival Qualcomm's recent deal with Amazon.
- 10 stocks we like better than Marvell Technology ›
Shares of the semiconductor company Marvell Technology (NASDAQ: MRVL) jumped by more than 7% today after Marvell CEO Matt Murphy went on CNBC last night and said that his company has earned a lot of trust with its customers.
Murphy noted that competition in the semiconductor industry is heating up, but that Marvell is confident in its market position as it works with many AI customers. Investors appeared to take Murphy's comments to heart, even after Marvell recently missed out on a major chip deal with Amazon to rival Qualcomm.
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Marvell stock was up by 5.4% as of 11:56 am ET.
Image source: The Motley Fool.
Marvell's CEO provided a confidence boost
Murphy said on CNBC's "Mad Money" show last night that, "In this market, these large hyperscale customers and the ecosystem around it, it's really based on trust," Adding, "I think trust has been a huge part of... our brand and our credibility."
Marvell shareholders latched onto his positive comments and pushed the company's share price higher today. Murphy also noted in the interview that his company is the "Switzerland" of the semiconductor industry because it works with everybody.
That helped reassure shareholders today, even as Marvell recently lost out to rival Qualcomm to supply AI processors to Amazon. Qualcomm will design custom AI chips for Amazon as part of the deal, which could be worth up to $60 billion.
Amazon choosing Qualcomm shows just how competitive the AI chip space is right now, but Marvell has had its own wins, too. The company recently signed a deal with Alphabet's Google to design some of its custom AI chips, part of which gives Google the ability to purchase up to $12 billion of Marvell shares.
The AI spending spree continues
Marvell's shares have been volatile lately, but they're still up an impressive 257% over the past year. With AI chip demand still sky-high, it's likely that Marvell and its rivals will continue to benefit. The latest estimates from S&P Global show that tech companies will exceed $1.3 trillion in AI infrastructure spending next year.
If you're considering buying Marvell stock right now, just know that you're paying a premium for it. Marvell stock has a trailing price-to-earnings (P/E) ratio of about 75 right now, which is far above the tech sector's average P/E ratio of about 33.
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Marvell Technology, Qualcomm, and S&P Global. The Motley Fool has a disclosure policy.
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