Chipmaker Marvell Technology (MRVL.O) forecast first-quarter revenue above estimates on Wednesday, driven by robust demand for custom chips from businesses aiming to optimize AI workloads.
The demand and resulting shortage of AI chips have driven up the prices of Nvidia's (NVDA.O) AI processors. As a result, tech giants such as Microsoft (MSFT.O), Meta Platforms (META.O), and Amazon.com (AMZN.O) are reducing their reliance on Nvidia by developing their own AI processors.
This strategic shift has benefited other chipmakers, such as Marvell and Broadcom (AVGO.O).
Marvell's data center segment, the company's strongest performer and which accounts for over 70% of the total revenue, grew 78% from a year earlier to $1.37 billion in the fourth quarter.
The company expects first-quarter revenue to be $1.88 billion, compared with analysts' average estimate of $1.87 billion according to data compiled by LSEG.
Shares of the Santa Clara, California-based company fell 9% in extended trading.
