Marvell, Synopsys close lower despite forecast-topping earnings buoyed by AI
Semiconductor specialists Marvell Technology Inc. and Synopsys Inc. today posted quarterly revenue numbers that topped analyst expectations.
The two companies also raised their guidance. Both attributed the increase to growing demand from artificial intelligence data center builders. That’s a positive signal for the broader chip market, where Marvell and Synopsys play important roles. Nevertheless, the companies’ stocks closed 4.6% and 1.6% lower, respectively.
Marvell’s first-quarter adjusted profit of 80 cents per share was in line with analyst expectations. Its revenue climbed 28% on a year-over-year basis, to $2.41 billion. That’s $18 million more than what the company had projected and a hair above the consensus estimate.
One of the main contributors to Marvell’s better-than-expected sales growth was its optical networking business. The unit makes digital signal processors, chips that turn electrical data into light that can be transmitted over fiber-optic links. Marvell also makes switches that can coordinate the traffic flowing through those links. Optical networking equipment is widely used in AI clusters because it’s faster than traditional copper wiring.
