Shares of Marvell Technology continued a big in a single day rally Friday morning, surging about 25% off the again of quarterly earnings outcomes that beat on the highest and backside strains.

On Thursday, the chipmaker posted 31 cents in adjusted earnings per share for the primary quarter, greater than Refinitiv consensus estimate of 29 cents per share. Revenue got here in at $1.32 billion for the interval, greater than the $1.3 billion analyst consensus.

Marvell shares at the moment are buying and selling at ranges not seen since April 2022.

On an analyst convention name, Marvell CEO Matthew Murphy stated the corporate had begun to reassess the way it regarded on the “large” business potential of AI.

“In the previous, we thought of AI to be certainly one of many purposes inside cloud, however its significance and due to this fact the chance has elevated dramatically,” Murphy stated.

Citi analysts stated in a notice to traders that the corporate has a significant alternative to develop its AI-driven income. Citi upped its worth goal from $58 to $61 and maintained its purchase score.

“In FY2023, MRVL estimated its AI income to be ~ $200 million, representing a powerful uptick from FY22. The firm expects AI gross sales to achieve ~$400M+ in FY24 earlier than doubling in FY25,” the notice from Citi’s Atif Malik stated.

Many semiconductor companies skilled a carry from Nvidia’s Wednesday blowout earnings report. Nvidia’s market capitalization now sits close to $1 trillion.

CNBC’s Michael Bloom and Chris Hayes contributed to this report.