Shares of this chipmaker are up 20% after-hours: explained here

Shares of Marvell Technology Inc (NASDAQ: MRVL) jumped nearly 20% in after-hours trading after the chipmaker reported strong Q3 results and gave upbeat guidance for the future.

Important points in the Q3 earnings report

Marvell said it lost $62.5 million in the third quarter that translates to 8 cents per share. In the comparable quarter of last year, its net loss was capped at a much lower $22.9 million or 3 cents a share.

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On an adjusted basis, the chipmaker earned 43 cents per share versus the year-ago figure of 25 cents. At a record $1.21 billion, revenue in the recent quarter came in 61% up on a year-over-year basis.

According to FactSet, experts had forecast 38 cents of adjusted EPS on $1.15 billion in revenue. Data centre revenue more than doubled from last year and contributed the most to Q3 revenue at 41%. Marvell’s adjusted gross margin stood at 65.1%.

Also on Thursday, Goldman Sachs’ Katie Koch said, “we could be at the precipice of a super cycle in semiconductor demand”.

Guidance for the fiscal fourth quarter

For the current quarter, Marvell forecasts up to 51 cents of adjusted per-share earnings on $1.28 billion to $1.36 billion in revenue. In comparison, analysts were calling for 42 cents of EPS on an adjusted basis and $1.21 billion in revenue.

Its Q4, the semiconductor company added, will see contribution from Innovium Inc – an acquisition that it completed in early October. In the earnings press release, CEO Matt Murphy said:

For Q4, we are expecting sequential revenue growth of 9% at the mid-point of guidance, led by 5G, which is projected to increase by 30% sequentially and data centre, which is forecasted to continue to grow in double digits on a percentage basis.