Investing.com-- Shares of Amazon supplier Marvell Technology rose on Thursday after the internet giant reiterated its commitment to spending on artificial intelligence chips and infrastructure.
Marvell Technology Inc (NASDAQ:MRVL) shares rose 3.1% in aftermarket trade to $122.92, after adding 2.4% during Thursday’s session. Amazon.com Inc (NASDAQ:AMZN) shares fell more than 4%.
Amazon- which is a customer of Marvell- reported slightly weaker-than-expected earnings from its Amazon Web Services unit for the fourth quarter.
But Amazon reiterated its plans to continue spending billions of dollars on growing its AWS capabilities, which entails more spending on AI chips, network equipment and data center infrastructure.
CFO Brian Olsavsky signaled that capital expenditures could surpass $100 billion in 2025.
“The majority of (capital expenditure in 2025) will be to support the growing need for technology and infrastructure. This primarily relates to AWS, including to support demand for our AI services,” Olsavsky said in prepared remarks during a post-earnings call.
Amazon and Marvell had in late-2024 announced a five-year, “multi-generational” agreement under which Marvell will provide Amazon Web Services with custom chips and other data center equipment.
Marvell had in part designed AWS’ custom Trainium 2 AI chip, with Amazon having flagged plans to compete with AI major NVIDIA Corporation (NASDAQ:NVDA) with its own chips and server offerings.
Marvell- whose shares more than doubled in 2024- is expected to continue benefiting from increased demand for AI chips, especially in data center applications.
Beyond Amazon, the company’s main customers are original equipment manufacturers and original design manufacturers, which use specialized chips from the company.