Marvell stock surges after company raises 2028 revenue outlook to $20 billion

What happened: Marvell Technology ( MRVL ) stock surged roughly 8% on Tuesday, touching its highest level since June.

What's behind the move: The semiconductor designer raised its revenue guidance for fiscal year 2028, exceeding the average analyst estimate.

"We expect approximately $20 billion in total company revenue in FY28, representing about 67% year-over-year growth," CEO Matt Murphy said during the company's investor day conference on Tuesday.

Marvell had guided to $18 billion in August, while Wall Street had anticipated $18.2 billion for the period, according to Bloomberg data.

The company sees a total addressable AI market expected to reach approximately $400 billion by 2030, driven by custom silicon programs with hyperscalers such as Amazon ( AMZN ), Google ( GOOG , GOOGL ), and Microsoft ( MSFT ).

What else you need to know: Semiconductor stocks have been at the center of the artificial intelligence trade this year, pushing the broader markets to all-time highs.

Marvell, which competes with Broadcom ( AVGO ), designs high-speed infrastructure and custom chips that enable AI computers to communicate with one another.

Earlier this year, Marvell stock rallied sharply after AI chip heavyweight Nvidia ( NVDA ) CEO Jensen Huang described the chip designer as "the next trillion-dollar company.

The company joined the S&P 500 ( ^GSPC ) index in June. Marvell shares are up more than 240% year to date.

Ines Ferre is a senior business reporter for Yahoo Finance.