March 5 (Reuters) - Marvell Technology forecast first-quarter revenue above Wall Street estimates on Thursday, driven by rising demand for custom chips used in data centers to support artificial intelligence applications, sending its shares up 9% in extended trading.
Growing adoption of AI tools by enterprise clients has boosted demand for specialized chips that power advanced data centers, benefiting companies such as Marvell and Broadcom that design application-specific integrated circuits (ASICs)
Big Tech firms including Alphabet, Microsoft, Amazon and Meta are expected to spend at least $630 billion to build AI infrastructure this year, lifting demand for chips, servers and networking equipment from companies such as Marvell.
Marvell expects revenue of around $2.40 billion, plus or minus 5% for the first quarter, above analysts' average estimate of $2.27 billion, according to data compiled by LSEG.
"We expect year-over-year revenue growth to accelerate each quarter in fiscal 2027, driven by continued strength in our data center business, with bookings continuing to grow at a record pace," CEO Matt Murphy said in a statement.
Marvell and rival Broadcom help cloud-computing companies design custom chips tailored to their data-center workloads, a fast-growing business as hyperscalers seek alternatives to Nvidia's general-purpose AI processors.
Broadcom on Wednesday said it expected over $100 billion in AI chip sales next year, signaling rapid share in the market dominated by Nvidia, which last month reported better-than-expected results for the January quarter.
For the fourth quarter, Marvell reported a 22% increase in revenue to $2.22 billion, slightly above estimates of $2.21 billion.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid)
