Shares in AI chipmaker Marvell Technology, Inc. (Nasdaq: MRVL) are surging this morning, with the company’s stock price reaching new all-time highs in pre-market trading.
But the share price surge isn’t down to a specific announcement from the more than 30-year-old Santa Clara, California semiconductor firm. Rather, Marvell’s skyrocketing shares all come down to four little words from Nvidia’s CEO, Jensen Huang. Here’s what you need to know.
What is Marvell?
Marvell Technology is a mid-sized US semiconductor company founded in 1995. Though it makes computer chips, it doesn’t specialize in the chips most people think about when they hear “semiconductors”—the central processing units (CPUs) that are the brains of the personal computer or the graphics processing units (GPUs) that power video graphics or modern artificial intelligence data centers.
Rather, Marvell’s specialty is making the computer chips that interconnect the technologies powering AI data centers. Simply put, a data center requires thousands of CPUs and GPUs to carry out its AI tasks. Marvell’s chips enable those thousands of CPUs and GPUs to communicate efficiently and exchange data quickly.
What did Nvidia’s Jensen Huang say about Marvell?
This week, Nvidia CEO Jensen Huang is in Taiwan for the annual Computex tech trade show. And Huang has been busy while there.
Yesterday, Huang announced Nvidia’s new RTX Spark AI superchip while speaking at Computex. The RTX Spark is based on ARM architecture, and that news sent shares in Arm Holdings soaring on Monday.
But that’s not the only golden touch Huang’s words have had this week. Today at Computex, Haung featured took part in an onstage conversation with Marvell CEO Matthew Murphy after Murphy gave a presentation on his company’s latest AI infrastructure advancements.
During that conversation, Huang said four little words that have sent investors flocking to Marvell’s stock. The Nvidia CEO told Murphy that Marvell stood to be the “next trillion-dollar company,” according to CNBC.
Huang explained that modern AI datacenters can only work as effectively as they do because the clusters of chips they contain can communicate effectively. This efficiency relies on the semiconductor technologies provided by companies like Marvell.
“That’s the reason why [Marvell CEO Matthew Murphy is] doing so well. That’s the reason why Marvel is so essential,” Haung said.
MRVL stock surges over 25% on Huang’s comments
After reports of Huang’s comments circulated online, investors began pouring into MRVL stock. As the de facto leader of the hardware side of the AI revolution, industry watchers and Wall Street insiders give great weight to Huang’s opinion.
If Huang says Marvell will be the next trillion-dollar tech giant, some investors obviously don’t want to miss out. Following Huang’s comments, MRVL stock surged to over 25% in pre-market trading. As of the time of this writing, MRVL shares are up about 22% to $268.20. Yesterday, Marvell’s share price closed at $219.43.
Even before today’s pre-market jump, Marvell’s stock price has had a great run recently. At yesterday’s closing price, MRVL shares were up more than 158% for the year. And over the past 12 months, MRVL shares have surged more than 264%.
At yesterday’s closing price, Marvell’s market capitalization stood around $192 billion, meaning the company’s stock price would need to increase nearly five times in order for it to join the $1 trillion market cap club.
Whether or not Haung is right and Marvell does indeed reach that price remains to be seen. If it does, it would join the most exclusive list of companies in the world in the trillion-dollar club, which currently includes Nvidia, Alphabet, Apple, Microsoft, Amazon, TSMC, Broadcom, Saudi Aramco, Tesla, Samsung, and Meta.
