- Marvell Technology (NASDAQ:) shares surged as much as 16% in pre-market Friday after the chipmaker reported better-than-expected first-quarter results and offered encouraging revenue guidance for the current quarter as artificial intelligence (AI) emerges as a key growth driver.

The chipmaker reported Q1 adjusted of 31 cents on revenue of $1.32 billion, compared with estimates for 29 cents on revenue of $1.30B.

Data center, which services cloud and artificial intelligence customers and makes up the bulk of growth of its five end markets, saw revenue fall to $435.8M from $640.5M a year earlier.

Looking ahead, the company forecast fiscal second-quarter adjusted EPS to be 32 cents per share, plus or minus 5 cents, while net revenue is expected to be $1.33B, plus or minus 5%. That compared with Wall Street estimates for EPS of $1.31 and revenue of $1.31B.

The company sees annual revenue related to artificial intelligence to at least double in fiscal 2024.

"While we are still in the early stages of our AI ramp, we are forecasting our AI revenue in fiscal 2024 to at least double from the prior year and continue to grow rapidly in the coming years," the company said.

Stifel analysts raised the price target by $9 to $65 per share as the company's big data infrastructure bet is paying off.

"Given the increased visibility into healthier q/q growth rates and material operating leverage, we reiterate Buy on MRVL (top large-cap pick)," they wrote in a note.

Rosenblatt analysts still see Marvel and Nvidia (NASDAQ:) as top secular ideas. They have a $100 per share price target on MRVL stock.

"Now that the overhead of inventory concerns has been lifted and AI momentum is emerging the story is cleaner from here on out," the analysts said.

Additional reporting by Senad Karaahmetovic