11:48 AM EDT, 08/30/2024 (MT Newswires) -- Marvell Technology's ( MRVL ) artificial intelligence-driven business is poised for further growth with legacy markets such as networking and storage "no longer a headwind," UBS Securities said Friday in a report.

Marvell ( MRVL ) reported fiscal Q2 non-GAAP net income late Thursday of $0.30 per diluted share on revenue of $1.27 billion. Analysts polled by Capital IQ expected EPS of $0.29 on revenue of $1.25 billion. For Q3, Marvell ( MRVL ) expects revenue of $1.45 billion, plus or minus 5%. Analysts polled by Capital IQ expect $1.41 billion.

Revenue and guidance exceeded expectations, supported by data center demand and robust growth in AI application-specific integrated circuits, UBS said.

"Custom silicon programs will drive meaningful growth in data center in Q3 and optics should grow sequentially through FY25," UBS said.

Despite anticipated pressure on gross margins, Marvell ( MRVL ) is expected to double EPS through 2026, UBS said.

UBS maintained a buy rating on Marvell's ( MRVL ) stock with a $95 price target.

Shares of Marvell ( MRVL ) jumped 7.8% in recent trading Friday.

Price: 75.29, Change: +5.45, Percent Change: +7.80