Marvell Stock Plunges As Wall Street Warns Of Limited Near-Term Growth Prospects
News Summary
Marvell Technology (MRVL) shares tumbled Friday after the chipmaker's upbeat second-quarter results were overshadowed by underwhelming third-quarter guidance. This prompted Wall Street analysts to trim price forecasts and deepened investor concerns over the near-term outlook. Marvell reported adjusted earnings of 67 cents per share, slightly beating the 66 cents forecast, and revenue of $2.006 billion, just shy of the $2.009 billion estimate. Adjusted gross margin stood at 59.4%, reflecting resilient AI-focused sales. However, the company's third-quarter revenue guidance of $1.957 billion to $2.163 billion fell below the $2.105 billion estimate, and adjusted EPS guidance of 69 cents to 79 cents was also lower than the 72 cents estimate. Analysts from Rosenblatt Securities, JP Morgan, and Goldman Sachs all cut Marvell's price targets, citing near-term headwinds despite strong long-term drivers like AI custom silicon and electro-optics demand. Goldman Sachs specifically noted that data center revenue growth was driven by optical strength, while custom silicon declined, with a rebound expected in 2026 as Microsoft's custom chip programs ramp up.
Background
Marvell Technology (MRVL) is a leading fabless semiconductor company globally, specializing in custom silicon and electro-optics products for the data infrastructure market. Its products are widely used in data centers, enterprise networking, carrier infrastructure, and automotive sectors. In recent years, Marvell has benefited from the artificial intelligence (AI) boom, with its custom silicon (ASIC) and electro-optics products playing a crucial role in meeting hyperscale data center customers' demands for AI acceleration and high-speed interconnects. The company's stock had previously surged due to investor optimism regarding its potential in AI and hyperscale spending growth. More recently, Marvell also divested its Automotive Ethernet business, an event that has impacted its future revenue forecasts.
In-Depth AI Insights
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