Marvell Technology's Stock Plummets Amid Weak Data Center Outlook and AI Chip Concerns

Marvell sinks as weak data center outlook stokes AI chip worries

Aug 29 (Reuters) - Shares of Marvell Technology slumped 11.3% in premarket trading on Friday as the chipmaker's data center demand outlook fell short of lofty expectations after investors bet big on custom chips that power AI workloads for cloud giants such as Microsoft (MSFT.O), opens new tab and Amazon (AMZN.O), opens new tab. Investor expectations for AI-focused chipmakers have been elevated, but recent results have shown signs of a cooling market. Nvidia's (NVDA.O), opens new tab latest earnings beat forecasts, but its data center growth slowed and shares fell post-report. Peer Broadcom (AVGO.O), opens new tab has yet to report. Marvell's reliance on so-called custom application-specific integrated circuits exposes it to customer inventory-led swings in demand. CEO Matthew Murphy said on a post-earnings call on Thursday that data center revenue in the third quarter will be flat on a sequential basis, but did not elaborate on the source of the weakness. Murphy said "lumpiness" was normal when large cloud compute providers build out infrastructure. "We aren't surprised at lumpiness, but we are surprised that the ASIC (chips business) full year (revenue) continues to fall," Morgan Stanley analysts said. A recent media report said that Microsoft had delayed its in-house AI chip rollout to 2028 or later, potentially impacting Marvell's pipeline, as it supplies key components for those designs. Amazon Web Services, another major customer for Marvell, has been ceding ground to faster-growing rivals, with Microsoft's Azure and Alphabet's (GOOGL.O), opens new tab Google Cloud outpacing AWS in recent quarters. Kinngai Chan, an analyst at Summit Insights, said that Marvell lacks scale relative to bigger peers and that large customers pursuing a multivendor sourcing strategy could weigh on its margins. Marvell reported second-quarter revenue of $2.01 billion, matching Wall Street expectations, but its third-quarter forecast of $2.06 billion, plus or minus 5%, came in below analysts' average estimate of $2.11 billion. It has a 12-month forward price-to-earnings ratio of 23.95, compared with Broadcom's 39.03, according to data compiled by LSEG, a gap that reflects investor caution around its growth prospects. Reporting by Rashika Singh in Bengaluru; Editing by Mrigank Dhaniwala Our Standards: The Thomson Reuters Trust Principles., opens new tab

Chipmaker Marvell's weak data center forecast prompts AI investors to dump its stock

Aug 28 (Reuters) - Chipmaker Marvell Technology (MRVL.O), opens new tab forecast quarterly revenue below market estimates on Thursday, disappointing investors who are accustomed to strong results from artificial intelligence-facing firms and sending its shares down 12% after hours. Shares of the company -- which designs custom chips to power AI workloads for big tech companies including Microsoft and Amazon -- have fallen 30% this year, as investors have doubted Marvell's position in the data center market. With investments in AI surging, chipmakers are facing tougher investor scrutiny as Wall Street's lofty expectations leave little room for disappointment. The company reported a smaller-than expected rise in second-quarter revenue in its data-center business -- up 69% to $1.49 billion versus an average estimate of $1.51 billion, according to LSEG data. Marvell's CEO Matthew Murphy said on a post-earnings call that data center revenue in the third quarter will be flat on a sequential basis, but that the fourth quarter would be substantially stronger. The bleak October-quarter outlook calls for a decline in Marvell's custom ASIC business, which was a negative surprise for investors, said Kinngai Chan, analyst at Summit Insights, referring to application-specific integrated circuits, or chips designed for specific tasks. "We were expecting growth to accelerate for its custom ASIC business as Marvell has design wins with multiple hyperscale customers. Instead, management talks about 'lumpiness' in its custom ASIC business," he said. Marvell did not say what caused the weakness in the business, but Murphy said "lumpiness" was normal when large cloud compute providers build out infrastructure. A media report said recently that Microsoft (MSFT.O), opens new tab had delayed the release of some of its upcoming in-house AI chips until 2028 or later, impacting Marvell as it is set to design some components for the chips. As well, Marvell's other large customer Amazon's (AMZN.O), opens new tab cloud business AWS has been losing ground to Microsoft's Azure and Alphabet's (GOOGL.O), opens new tab Google Cloud. AWS reported a 17.5% increase in revenue in the second quarter. By comparison, sales for Microsoft's Azure rose 39% and Google Cloud gained 32%. Stifel analyst Tore Svanberg said, though, that Marvell was well positioned to capitalize on the ASIC market, "but it will take 12-18 months before that business becomes more diversified to deliver more consistent beats-and-raises." Chip giant Nvidia's (NVDA.O), opens new tab CEO Jensen Huang on Wednesday dismissed concerns about an end to a spending boom on AI chips and said opportunities will expand into a multi-trillion-dollar market over the next five years. Marvell expects third-quarter revenue of $2.06 billion, plus or minus 5%, compared with analysts' average estimate of $2.11 billion. For the second quarter ended August 2, Marvell posted revenue of $2.01 billion, in line with analysts' estimates. The company completed the $2.5 billion sale of its automotive ethernet business to German chipmaker Infineon Technologies (IFXGn.DE), opens new tab earlier in August. Reporting by Juby Babu in Mexico City; Editing by Alan Barona and Sayantani Ghosh Our Standards: The Thomson Reuters Trust Principles., opens new tab

Chipmaker Marvell forecasts downbeat quarterly revenue, shares fall

Aug 28 (Reuters) - Chipmaker Marvell Technology (MRVL.O), opens new tab forecast third-quarter revenue below Wall Street estimates on Thursday, as economic uncertainty and tariff concerns weighed on customer spending and overall demand. Shares of the company, which manufactures custom chips to power AI workloads, fell over 8% in extended trading. Chipmakers are facing tough investor scrutiny as Wall Street's lofty expectations around artificial intelligence leave little room for disappointment. Marvell forecast comes as a disappointment following strong results from other AI hardware names, said Stifel analyst Tore Svanberg. Marvell enables AI deployments that support demand for hyperscalers. The broad adoption of genAI is driving increased demand for custom chips, as enterprises advance their technology strategies and continue to expand AI workloads. "Our custom business is performing well and remains on track to grow in the second-half of the fiscal year compared to the first. However, we expect growth to be non-linear in the custom business, with the fourth quarter substantially stronger than the third," CEO Matt Murphy said on a post-earnings call. Persistent inflation and economic uncertainty have led customers to delay purchases, resulting in weak demand at Marvell's automotive and industrial and carrier infrastructure end markets. Chip giant Nvidia's (NVDA.O), opens new tab CEO Jensen Huang on Wednesday dismissed concerns about an end to a spending boom on AI chips and said opportunities will expand into a multi-trillion-dollar market over the next five years. Nvidia said it sees revenue of $54 billion, plus or minus 2%, for the third quarter, compared with analysts' average estimate of $53.14 billion. Marvell expects quarterly revenue of $2.06 billion, plus or minus 5%, compared with analysts' average estimate of $2.11 billion, according to data compiled by LSEG. For the second quarter, ended August 2, Marvell posted revenue of $2.01 billion, in line with analysts' estimates. Revenue at the data center segment, Marvell's largest, grew 3% to $1.49 billion for the quarter, but fell short of estimates of $1.51 billion. Earlier in August, Marvell completed the sale of its automotive ethernet business to German chipmaker Infineon Technologies (IFXGn.DE), opens new tab for about $2.5 billion in cash. Reporting by Juby Babu in Mexico City; Editing by Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab

Marvell sinks as weak data center outlook stokes custom AI chip worries

Aug 29 (Reuters) - Shares of Marvell Technology (MRVL.O), opens new tab slumped 15% premarket on Friday, as the chipmaker's data center demand outlook fell short of lofty expectations owing to irregular sales of its custom AI chips to cloud giants. Investor expectations for chipmakers are elevated after their valuations have sky-rocketed due to Wall Street's picks-and-shovels AI trade, but market bellwether Nvidia's (NVDA.O), opens new tab latest earnings cast doubt over demand from cloud providers. Marvell CEO Matt Murphy said on a post-earnings call on Thursday that data center revenue in the third quarter would be sequentially flat, worrying investors and analysts about growth in its key segment that reflects demand for hardware used in AI data centers. The networking chipmaker's revenue is increasingly driven by its custom chip business which services cloud providers such as Amazon.com (AMZN.O), opens new tab and Microsoft (MSFT.O), opens new tab who are developing in-house capabilities to reduce their dependence on Nvidia. A recent media report, opens new tab said Microsoft had delayed its in-house AI chip rollout to 2028 or later. Murphy said "lumpiness" was normal when large cloud providers build infrastructure, referring to Marvell's exposure to uneven product development schedules and spending. Summit Insights analyst Kinngai Chan, who has a "hold" rating on the stock, said, "Marvell lacks scale relative to larger peers and expects hyperscale customers to pursue a multi-vendor sourcing strategy, which could weigh on margins." Marvell competes against larger rival Broadcom (AVGO.O), opens new tab for a piece of cloud providers' custom chip and networking businesses. Broadcom is yet to report July quarter results. Marvell is set to lose close to $10 billion in market value if premarket losses hold. It has a 12-month forward price-to-earnings ratio of 23.95, compared with Broadcom's 39.03, according to data compiled by LSEG. But Marvell expects its custom business to be stronger in the fourth quarter, Murphy said, implying an uptick later in the year as custom chip orders increase again. Reporting by Rashika Singh and Arsheeya Bajwa in Bengaluru; Editing by Mrigank Dhaniwala and Krishna Chandra Eluri Our Standards: The Thomson Reuters Trust Principles., opens new tab

Marvell stock slumps 16% after data center revenue, forecast disappoint

Marvell Technology Group Ltd. headquarters in Santa Clara, California, US, on Friday, Sept. 6, 2024. Shares of Marvell Technology plunged 15% on Friday after the artificial intelligence chipmaker's data center revenue fell short of estimates and it gave lackluster guidance for the current quarter. Here's how the company did in comparison with LSEG consensus: Revenue jumped 58% from a year ago in the fiscal second quarter that ended Aug. 2, a record for the company that was fueled in part by "strong AI demand" for its custom silicon and electro-optics products, Marvell CEO Matt Murphy said in a statement. The company had net income of $194.8 million, or 22 cents per share, compared with a net loss of $193.3 million, a loss of 22 cents per share, during the same period last year. For the fiscal third quarter, the company called for revenue to be $2.06 billion, plus or minus 5%. That was slightly below the $2.11 billion forecast by analysts, according to LSEG.

Marvell's stock slumps on concerns over custom silicon, but long-term prospects look strong - SiliconANGLE

Marvell's stock slumps on concerns over custom silicon, but long-term prospects look strong Marvell Technology Inc. could only match Wall Street's expectations on earnings and revenue as it delivered its latest financial results today, and followed with soft guidance for the current quarter. Predictably, its stock took a nosedive in extended trading, falling more than 11%. The computer server chipmaker reported second-quarter earnings before certain costs such as stock compensation of 67 cents per share, exactly in line with the analyst's consensus estimate. Revenue for the period rose 58% to $2.01 billion, but that too, was only in line with Wall Street's targets. The rising revenue meant Marvell was able to boost its bottom line, reporting net income for the quarter of $194.8 million, up from just $177.9 million in the year-ago period. Marvell Chief Executive Matt Murphy (pictured) told analysts that the $2.01 billion in revenue was a new record for the company, and said he expects that number to continue growing in the current quarter. He also anticipates growth in earnings and an expansion in its profit margins. "Marvell's growth is being fuelled by strong AI demand for our custom silicon and electro-optics, as well as a significant increase in the pace of recovery in our enterprise networking and carrier infrastructure end markets," Murphy said. Looking to the current quarter, Marvell set its revenue guidance at $2.06 billion at the midpoint of its range, trailing Wall Street's forecast of $2.11 billion. Marvell was once seen as one of the most promising bets outside of Nvidia Corp. in the artificial intelligence chip industry, but although it has grown its business considerably over the last three years, it has failed to live up to expectations this year. Prior to today, its stock was down 18% in the year to date, and today's after-hours decline only means it has now declined over 30%. "Despite strong year-over-year growth, the market reaction has been negative in after-hours trading as quarter three revenue guidance came in below Street expectations," Ethan Feller, an analyst with Zacks Investment Research, told SiliconANGLE. "That reinforces the importance of execution in a sector that has quickly become the most closely watched area of the market." On a conference call with analysts, Murphy talked about how the company has completed the divestiture of its automotive ethernet business. He said that reorganization gives it greater flexibility to continue its stock repurchases, and invest more capital into research and development. "The divestiture aligns with our strategy to focus the company on what we expect to continue to be a massive AI opportunity in front of us, by purposefully redirecting our investments towards data center, relative to our other end markets," Murphy explained. Murphy stressed the importance of ongoing investment in the data center business, as it now accounts for three-quarters of the company's total revenue. The company is reorganizing its remaining business units to reflect that, and beginning this quarter, it plans to consolidate all non-data center markets into a single end market. The CEO then turned to face questions over the company's guidance, and told analysts that growth in its custom silicon business is expected to be flat in the current quarter, before "substantially" improving in the fourth quarter. Marvell's custom silicon business involves making customized server chips to order for hyperscale data center operators such as Amazon Web Services Inc. The company makes a ton of cash by helping AWS design and manufacture its "Trainium" chips for artificial intelligence workloads, and it's also thought to be working with the likes of Google Cloud and Microsoft Corp. too, though it hasn't said so publicly. The Trainium chips compete with Nvidia Corp.'s graphics processing units, which are the most popular silicon for running AI workloads today. When pressed about the soft guidance for the custom silicon business, Murphy insisted that periodic setbacks of this nature are "not unusual". He added that the company's optics business is expected to grow significantly in the current quarter, which will help to ensure its continued overall revenue growth. Feller told SiliconANGLE that investors are likely concerned about the weakness in the custom silicon business, because AI remains the centerpiece of Marvell's growth strategy. He pointed to a statement from Murphy that Marvell's design teams are currently engaged with "over 50 new opportunities" involving more than 10 customers. "This underscores the company's aggressive pivot to AI-focused custom silicon, while its networking and cloud infrastructure businesses continue to provide complementary exposure [to AI]," Feller said. Although the value of Marvell's stock has dwindled, Feller believes it remains an enticing opportunity for investors at 27-times forward earnings. This means it's trading at a "meaningful discount" compared to many of its AI chip industry peers, he said. "The near-term revenue guidance is a disappointment, and does raise legitimate concerns, though the long-term growth story appears to be intact," Feller said. "It has been a challenging year for Marvell's stakeholders, but we believe the market will reward investors over the next 12 to 18 months as Marvell executes on its AI strategy and continues expanding its share in custom silicon."

Chipmaker Marvell's weak data centre forecast prompts AI investors to dump its stock - The Economic Times

Chipmaker Marvell Technology forecast quarterly revenue below market estimates on Thursday, disappointing investors who are accustomed to strong results from artificial intelligence-facing firms and sending its shares down 12% after hours. Shares of the company - which designs custom chips to power AI workloads for big tech companies including Microsoft and Amazon - have fallen 30% this year, as investors have doubted Marvell's position in the data centre market. With investments in AI surging, chipmakers are facing tougher investor scrutiny as Wall Street's lofty expectations leave little room for disappointment. The company reported a smaller-than expected rise in second-quarter revenue in its data-centre business - up 69% to $1.49 billion versus an average estimate of $1.51 billion, according to LSEG data. Marvell's CEO Matthew Murphy said on a post-earnings call that data centre revenue in the third quarter will be flat on a sequential basis, but that the fourth quarter would be substantially stronger. The bleak October-quarter outlook calls for a decline in Marvell's custom ASIC business, which was a negative surprise for investors, said Kinngai Chan, analyst at Summit Insights, referring to application-specific integrated circuits, or chips designed for specific tasks. "We were expecting growth to accelerate for its custom ASIC business as Marvell has design wins with multiple hyperscale customers. Instead, management talks about 'lumpiness' in its custom ASIC business," he said. Marvell did not say what caused the weakness in the business, but Murphy said "lumpiness" was normal when large cloud compute providers build out infrastructure. A media report said recently that Microsoft had delayed the release of some of its upcoming in-house AI chips until 2028 or later, impacting Marvell as it is set to design some components for the chips. As well, Marvell's other large customer Amazon's cloud business AWS has been losing ground to Microsoft's Azure and Alphabet's Google Cloud. AWS reported a 17.5% increase in revenue in the second quarter. By comparison, sales for Microsoft's Azure rose 39% and Google Cloud gained 32%. Stifel analyst Tore Svanberg said, though, that Marvell was well positioned to capitalize on the ASIC market, "but it will take 12-18 months before that business becomes more diversified to deliver more consistent beats-and-raises." Chip giant Nvidia's CEO Jensen Huang on Wednesday dismissed concerns about an end to a spending boom on AI chips and said opportunities will expand into a multi-trillion-dollar market over the next five years. Marvell expects third-quarter revenue of $2.06 billion, plus or minus 5%, compared with analysts' average estimate of $2.11 billion. For the second quarter ended August 2, Marvell posted revenue of $2.01 billion, in line with analysts' estimates. The company completed the $2.5 billion sale of its automotive ethernet business to German chipmaker Infineon Technologies earlier in August.

Marvell Technology Sells Auto Unit For $2.5 Billion To Go All-In On Data Center Business Amid AI Boom - Marvell Tech (NASDAQ:MRVL)

Marvell Technology Inc. MRVL has completed the $2.5 billion all-cash sale of its automotive Ethernet business, a strategic move that sharpens its focus on the booming data center and artificial intelligence markets. Check out MRVL's stock price here. MRVL Prioritizes Data Center And AI Business The sale underscores Marvell's commitment to prioritizing its most significant growth engine. The data center segment, fueled by explosive demand for AI infrastructure, now accounts for 74% of the company's total revenue, growing an immense 69% year-over-year. "The auto divestiture aligns with our strategy to focus the company on what we do best... purposefully redirecting our investments towards data center," Chairman and CEO Matt Murphy said on the call. He noted the company sees a "massive AI opportunity in front of us." To reflect its intensified focus, Marvell will streamline its financial reporting next quarter into two segments: "Data Center" and the newly consolidated "Communications and Other," further cementing its identity as an AI-first enterprise. Plans To Continue Buy Back Program Proceeds from the transaction provide Marvell with significant financial flexibility. The company plans to use the capital to bolster its technology and continue its stock repurchase program, where approximately $2 billion remains authorized. "The proceeds from this transaction provide us flexibility to continue to drive our ongoing stock repurchase program and deploy capital to further bolster our technology platform," Murphy added. See Also: Marvell Stock Slips After Q2 Earnings Report: Here's Why Expects 'Lumpiness' In Q3 Custom Silicon Chips Business MRVL guided for a temporary sequential dip in custom silicon business, which it termed a "digestion" quarter. CEO Murphy attributed this not to a fundamental problem, but to the natural timing of massive build-outs by its large hyperscale customers. He described it as a normal "timing issue" in fulfilling large-scale orders and reassured investors that the pause is temporary, forecasting that the business will be "substantially stronger" in the fourth quarter. Marvell Q2 Earnings Snapshot It reported second-quarter earnings of 67 cents per share, which beat the analyst estimate of 66 cents, whereas quarterly revenue came in at $2.006 billion, which missed the Street estimate of $2.009 billion. Marvell is looking for third-quarter adjusted earnings of between 69 cents and 79 cents per share, versus the 72 cent estimate, and revenue in a range of $1.957 billion to $2.163 billion, versus the $2.105 billion analyst estimate. Price Action Marvell's shares closed 3.26% higher on Thursday and fell 11.28% after hours. It was down -31.99% year-to-date but up 10.58% over the year. Benzinga's Edge Stock Rankings indicate that MRVL maintains a stronger price trend in the medium term but a weaker trend over the short and long terms. The stock also scores poorly on value and growth rankings. Additional performance details are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Thursday. The SPY was up 0.35% at $648.92, while the QQQ advanced 0.63% to $577.08, according to Benzinga Pro data. On Friday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading lower. Read Next Snowflake Goes On Hiring Spree Even As Other Firms Brace For Tariff-Induced Slowdown: Adds More Sales Staff In 6 Months Than Prior 2 Years Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: JHVEPhoto / Shutterstock.com MRVLMarvell Technology Inc$68.52-11.3%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum28.19Growth20.31QualityN/AValue17.89Price TrendShortMediumLongOverviewQQQInvesco QQQ Trust, Series 1$576.64-0.08%SPYSPDR S&P 500$648.65-0.04%Market News and Data brought to you by Benzinga APIs

What's Going On With Marvell Technology Stock Thursday? - Marvell Tech (NASDAQ:MRVL)

Marvell Technology MRVL shares surged Thursday as investors bet on the company to deliver strong second-quarter results, scheduled for after the closing bell. Optimism has been fueled by accelerating demand for artificial intelligence infrastructure and expectations that Marvell will capture a growing share of hyperscale spending. The rally followed industry peer Nvidia's NVDA blockbuster results, which reinforced expectations of sustained demand from the artificial intelligence buildout. Also Read: Marvell Set To Double AI Chip Sales To $4 Billion Next Year, Analyst Projects Nvidia on Wednesday reported revenue of $46.74 billion for the second quarter, up 56% from a year earlier and ahead of consensus estimates of $46.02 billion. Adjusted earnings of $1.05 per share topped expectations of $1.01, while gross margins expanded to 72.7%, underscoring the company's competitive strength. On Wednesday, Nvidia CEO Jensen Huang confidently rebuffed fears of a slowdown in AI chip investment, stating that a multi-trillion-dollar market opportunity will unfold over the next five years. His comments, reported by Reuters, come amid intense investor scrutiny over the sustainability of the recent spending boom on artificial intelligence. Against this backdrop, analysts see Marvell as a key beneficiary of AI's structural buildout. In a recent report, JP Morgan's Harlan Sur reiterated a positive long-term outlook, arguing that Marvell is well placed to benefit from accelerating hyperscale capital expenditures and the structural shift toward AI-driven infrastructure. He projects that the company's AI-related business will more than double year-over-year to $4 billion in 2025 and continue to accelerate in 2026. According to Sur, Marvell's AI-related business is expected to accelerate in 2026, primarily due to progress on Trainium 3 at Amazon's AMZN Amazon Web Services (AWS) and the MAIA Gen 3 program at Microsoft MSFT. Trainium 3, which operates on a 3nm process, is on track for a high-volume ramp in 2026, while the MAIA Gen 3 program, utilizing 2nm/3nm chiplets, is slated for production in 2027-2028. Additionally, Marvell has secured multiple 2nm design wins for future products, further solidifying its position in the AI infrastructure market. Wall Street sentiment reflects this optimism. Consensus estimates from 31 analysts place Marvell's price forecast at $100.35, with Barclays setting the highest forecast at $150 in January 2025 and Redburn Atlantic the lowest at $67 in May. Investor enthusiasm is also supported by rising capital expenditures from hyperscale customers such as Microsoft, Meta Platforms META, and Apple AAPL, which are ramping up investments in AI capacity. Nvidia's stellar performance has only intensified momentum across the broader data infrastructure sector, with Marvell positioned as a key supplier. Price Action: MRVL stock is trading higher by 2.34% to $76.54 at last check Thursday. Photo via Shutterstock MRVLMarvell Technology Inc $76.542.34% Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full Score Edge Rankings Momentum 27.33 Growth 20.31 Quality N/A Value 17.90 Price Trend Short Medium Long Overview AAPLApple Inc $232.740.98% AMZNAmazon.com Inc $231.901.21% METAMeta Platforms Inc $750.790.46% MSFTMicrosoft Corp $507.910.23% NVDANVIDIA Corp $179.14-1.35% Market News and Data brought to you by Benzinga APIs

Why Is Marvell Technology Stock Sinking Friday? - Marvell Tech (NASDAQ:MRVL)

Marvell Technology MRVL shares tumbled Friday after the chipmaker's upbeat second-quarter results were overshadowed by underwhelming third-quarter guidance, prompting Wall Street to trim price forecasts and deepening investor concerns over the near-term outlook. Marvell posted adjusted earnings of 67 cents per share, edging past Wall Street's forecast of 66 cents. Revenue came in at $2.006 billion, just shy of the $2.009 billion consensus estimate. Adjusted gross margin was 59.4%, reflecting resilient AI-focused sales. "Marvell delivered record revenue of $2.006 billion in the second quarter, a 58% year-over-year increase, and we expect continued growth into the third quarter, accompanied by operating margin and earnings per share expansion," said Matt Murphy, Marvell's Chairman and CEO. Also Read: Marvell Stock Surges as Investors Bet on AI Boom and Hyperscale Spending Growth "Marvell's growth is being fueled by strong AI demand for our custom silicon and electro-optics products, as well as a significant increase in the pace of recovery in our enterprise networking and carrier infrastructure end markets," Murphy added. For the third quarter, Marvell expects revenue between $1.957 billion and $2.163 billion (vs. $2.105 billion estimate) and adjusted EPS of 69 cents to 79 cents (versus 72 cents estimate). Analysts responded by trimming price forecasts, citing both near-term headwinds and long-term opportunities. Kevin Cassidy of Rosenblatt Securities described Marvell's results as mixed, noting that data center ASIC shipment adjustments between October and January contributed to a slight revenue shortfall, even as earnings came in ahead of expectations. Looking ahead, the firm lowered its fiscal 2027 revenue outlook to reflect the divestiture of Marvell's Automotive Ethernet business and softer data center shipments. Despite the near-term revisions, Rosenblatt maintained a Buy rating, citing a strong pipeline of 18 upcoming ASICs and more than 50 additional design opportunities that it believes will diversify revenue and reduce customer concentration. The firm cut its 12-month price forecast to $95 from $124. JP Morgan analyst Harlan Sur said Marvell's July-quarter results were in line, as stronger consumer demand offset softer data center and carrier sales. The analyst noted that the October-quarter guidance of $2.06 billion was broadly in line after accounting for the Automotive Ethernet divestiture. The firm expects flat data center revenue, with optical networking growth offset by uneven custom ASIC shipments, which should reaccelerate in 2026. Carrier and enterprise networking sales are projected to climb 30% sequentially. J.P. Morgan reiterated an Overweight rating while cutting its price forecast to $120 from $130, citing near-term lumpiness but strong long-term drivers. The analyst pointed to Amazon's AMZN Trainium and Microsoft's MSFT Maia ASIC programs on track for 2026 production, alongside robust demand for Marvell's optical products. Goldman Sachs called Marvell's results in line, with revenue and earnings slightly ahead on margins but offering little upside on sales. The firm said muted guidance reflects limited near-term traction for the company's custom silicon business, even as optical demand remains strong. Analyst James Schneider maintained a Neutral rating and cut his price forecast to $72 from $75, citing slower growth assumptions and ongoing content loss at Amazon ahead of Microsoft's expected custom chip ramp in 2026. He noted that data center revenue rose 3% sequentially on optical strength but was offset by declines in custom silicon, which should rebound later in the year. Goldman trimmed its EPS estimates by about 5% to $3.00 normalized EPS and said stock performance will likely hinge on the scale of Marvell's custom compute ramp in 2026. Price Action: MRVL stock is trading lower by 16.15% to $64.76 at last check Friday. Read Next: Li Auto Predicts Major Hit To Sales As Industry Struggles Intensify Image via Shutterstock MRVLMarvell Technology Inc$64.78-16.1%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum28.19Growth20.31QualityN/AValue17.89Price TrendShortMediumLongOverviewAMZNAmazon.com Inc$228.80-1.21%MSFTMicrosoft Corp$507.83-0.36%Market News and Data brought to you by Benzinga APIs

Marvell Revenue Jumps 58% in Fiscal Q2 | The Motley Fool

Marvell Technology (MRVL 3.52%), a major supplier of semiconductor solutions for data infrastructure and networking, released its Q2 FY2026 results on August 28, 2025. The headline news was record GAAP revenue of $2.006 billion, up 58.0% from a year earlier and $6.0 million above the mid-point of prior guidance. The company also reported non-GAAP earnings per share (EPS) of $0.67, more than double the previous year's $0.30 and at the top end of its guided range. With operating margin expansion and robust results in data center and networking, this quarter showed record-setting sales, AI-driven demand, and strong execution, while also making note of margin pressures and customer concentration as risks to monitor. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2026 earnings report. Marvell Technology designs and sells semiconductor devices used to move, store, and process data. Its products help power cloud computing, artificial intelligence (AI), networking, storage, and connectivity platforms in data centers and networks worldwide. In recent years, Marvell has heavily focused on the data center and enterprise networking markets. Success for Marvell hinges on ongoing innovation in custom silicon, signal processing, and interconnect products, as well as expanding its presence with cloud and AI customers. Key priorities have included rapid R&D investments, building a strong intellectual property (IP) portfolio, and maintaining robust relationships in a competitive landscape. During the period, Marvell delivered its highest GAAP revenue on record. The data center segment was the primary engine, generating $1.49 billion, or 74% of total GAAP revenue, a 69% increase from the previous year. Most of this segment's gains were driven by demand for AI-related custom silicon and advanced electro-optics products, as stated by management: ""Marvell's growth this quarter is being fueled by strong AI demand for our custom silicon and electro-optics products, as well as a significant increase in the pace of recovery in our enterprise networking and carrier infrastructure end markets. Our custom AI design activity is at an all-time high, with the Marvell team now engaged in over 50 new opportunities across more than 10 customers."" Revenue in this group rose 28% year over year to $193.6 million, making up 10 % of total sales. Carrier infrastructure, which supports wireless and telecom networks, grew by 71% year over year to $130.1 million (GAAP). While the consumer segment showed a large quarterly increase, this business is known for lower average margins. Automotive and industrial revenue (GAAP) was $76.0 million, compared to $76.2 million in Q2 FY2025 but will shrink in coming quarters following the sale of the Automotive Ethernet business, divested on August 14, 2025. With GAAP research and development investment increasing to $519.0 million, Marvell's commitment to maintaining its technology leadership is clear. Non-GAAP operating margin climbed to 34.8%, up 8.7 percentage points from Q2 FY2025. Non-GAAP gross margin slipped to 59.4%, down from 61.9% a year ago, consistent with previous statements that a higher share of custom AI silicon programs carries structurally lower gross margins but remains accretive at the operating margin level due to larger revenue contributions. Inventory levels grew only moderately in Q1 FY2026. The company noted a sizeable increase in accounts receivable, to $1.45 billion (GAAP) as of Q2 FY2026. Security of Marvell's intellectual property portfolio continues to play a vital role. However, Marvell did complete the divestiture of its Automotive Ethernet business in August, which will result in a significant one-time gain in Q3 FY2026. For the third quarter of fiscal 2026, management expects GAAP revenue in the range of $2.06 billion plus or minus 5%. Non-GAAP earnings per share are guided at $0.74, while GAAP earnings per share will show an inflated jump due to a one-time $2.10 per share gain on the completed automotive business divestiture. Underlying business earnings are therefore expected to grow only modestly from this quarter's level. Key areas for investors to watch include the pace of AI-related product adoption and the evolving mix of custom silicon, which directly impacts margins. Customer concentration in high-volume programs remains a potential risk, as does competition from large chipmakers with overlapping portfolios. The management team has highlighted innovation in next-generation chip architectures and continued investment in IP as important success factors, especially as new design wins with AI and hyperscale customers ramp. Marvell Technology does pay a dividend.

Marvell Posts Record Sales on AI Focus | The Motley Fool

Marvell Technology(MRVL 3.52%) reported record revenue of $2.006 billion in the fiscal second quarter ended Aug. 3, 2025 (+58% year-over-year revenue growth, +6% sequential revenue growth), non-GAAP EPS of $0.67 (+123% year-over-year (non-GAAP)), and operating cash flow of $462 million. Management announced the $2.5 billion divestiture of the Automotive Ethernet business, completed at the beginning of the fiscal third quarter ending Nov. 1, 2025, representing a major strategic pivot to AI-focused data center markets, with data center comprised 74% of total revenue. The following analysis highlights key developments in market focus, operating leverage, and custom silicon momentum. Management executed a $2.5 billion all-cash sale of the Automotive Ethernet business at the start of the fiscal third quarter, with proceeds to bolster buybacks and data center R&D. Data center end market revenue has more than doubled from 34% of total in 2024 to 74% in 2026, and is expected to continue outpacing other segments as new classification aligns reporting to this core strategy. "to further bolster our technology platform. The auto divestiture aligns with our strategy to focus the company on what we expect to continue to be a massive AI opportunity in front of us by purposely redirecting our investments towards data center, relative to our other end markets. That strategy has been very successful, with data center alone now driving three-quarters of our total revenue. The auto divestiture further reduces the relative proportion of revenue from our non-data center end markets. As a result, starting in the third quarter, we will consolidate our non-data center end markets into a new single communications and other end market." -- Matt Murphy, Chairman and CEO This transaction and reporting realignment cement Marvell's transformation into an AI and cloud-centric chip supplier, likely improving capital efficiency and competitive focus while simplifying investor narratives around long-term growth drivers. Non-GAAP operating margin expanded sharply by 870 basis points year-over-year to 34.8%, outpacing the 58% YoY revenue growth as Non-GAAP operating expenses came in below guidance. Operating cash flow rose to $462 million, up $129 million sequentially, with gross debt to EBITDA improving to 1.63x, providing further financial flexibility for buybacks or capacity investment. "We expanded our non-GAAP operating margin by 870 basis points year-over-year to 34.8%, and delivered record non-GAAP earnings per share of $0.67, up 123% year-over-year. We also delivered $462 million in operating cash flow, up significantly from the $333 million in the first quarter. Robust cash flow generation is enabling us to continue to return significant capital to our stockholders. We have repurchased $540 million of stock through the first half of the fiscal year, with approximately $2 billion remaining in our authorization." -- Matt Murphy, Chairman and CEO Sustained margin expansion and outsized EPS growth versus revenue point to greater fixed-cost absorption and scalable profitability as more custom silicon ramps to production, supporting Marvell's long-term compounding potential. Design win momentum is accelerating, with management disclosed over 50 pipeline opportunities representing $75 billion in estimated lifetime value as of June 2025. Over 90% of data center segment revenue is now tied to AI and cloud, while existing custom programs are ramping, and newly won sockets are expected to enter production over the next 24 months. "During the quarter, we hosted a highly successful custom silicon investor event in June, where we outlined an expanded $94 billion data center TAM for calendar 2028, a 26% increase from our prior view. We also unveiled a new fast-growing custom silicon product category of XPU attach, updated our custom design win board to 18 multi-generational XPU and XPU attached sockets, and highlighted over 50 new pipeline opportunities with an estimated $75 billion of lifetime revenue potential. Based on the sockets we have already won, we concluded with our plan to grow our data center market share from 13% of a $33 billion TAM in calendar 2024 to 20% of a $94 billion TAM in calendar 2028." -- Matt Murphy, Chairman and CEO This rapid expansion in design pipeline and TAM substantiates Marvell's increasing strategic value to hyperscalers, supporting a path for structurally higher revenue growth and long-term share gains in AI infrastructure semiconductors. Management guided total revenue to $2.06 billion at the midpoint for the fiscal third quarter ending Nov. 1, 2025 (+36% year-over-year revenue growth forecast), with non-GAAP EPS of $0.69 to $0.79 and gross margin in a 59.5%-60% range. The company remains on track to accelerate in the fiscal fourth quarter ending Jan. 31, 2026, driving annual second-half strength. Following the auto Ethernet divestiture, new reporting segments will be implemented beginning in the fiscal fourth quarter, further emphasizing the primacy of data center growth and profitability in Marvell's future outlook.

Marvell sinks as weak data center outlook stokes AI chip worries

(Reuters) -Shares of Marvell Technology slumped 11.3% in premarket trading on Friday as the chipmaker's data center demand outlook fell short of lofty expectations after investors bet big on custom chips that power AI workloads for cloud giants such as Microsoft and Amazon. Investor expectations for AI-focused chipmakers have been elevated, but recent results have shown signs of a cooling market. Nvidia's latest earnings beat forecasts, but its data center growth slowed and shares fell post-report. Peer Broadcom has yet to report. Marvell's reliance on so-called custom application-specific integrated circuits exposes it to customer inventory-led swings in demand. CEO Matthew Murphy said on a post-earnings call on Thursday that data center revenue in the third quarter will be flat on a sequential basis, but did not elaborate on the source of the weakness. Murphy said "lumpiness" was normal when large cloud compute providers build out infrastructure. "We aren't surprised at lumpiness, but we are surprised that the ASIC (chips business) full year (revenue) continues to fall," Morgan Stanley analysts said. A recent media report said that Microsoft had delayed its in-house AI chip rollout to 2028 or later, potentially impacting Marvell's pipeline, as it supplies key components for those designs. Amazon Web Services, another major customer for Marvell, has been ceding ground to faster-growing rivals, with Microsoft's Azure and Alphabet's Google Cloud outpacing AWS in recent quarters. Kinngai Chan, an analyst at Summit Insights, said that Marvell lacks scale relative to bigger peers and that large customers pursuing a multivendor sourcing strategy could weigh on its margins. Marvell reported second-quarter revenue of $2.01 billion, matching Wall Street expectations, but its third-quarter forecast of $2.06 billion, plus or minus 5%, came in below analysts' average estimate of $2.11 billion. It has a 12-month forward price-to-earnings ratio of 23.95, compared with Broadcom's 39.03, according to data compiled by LSEG, a gap that reflects investor caution around its growth prospects. (Reporting by Rashika Singh in Bengaluru; Editing by Mrigank Dhaniwala)

Chipmaker Marvell forecasts downbeat quarterly revenue, shares fall

(Reuters) -Chipmaker Marvell Technology forecast third-quarter revenue below Wall Street estimates on Thursday, as economic uncertainty and tariff concerns weighed on customer spending and overall demand. Shares of the company, which manufactures custom chips to power AI workloads, fell over 8% in extended trading. Chipmakers are facing tough investor scrutiny as Wall Street's lofty expectations around artificial intelligence leave little room for disappointment. Marvell forecast comes as a disappointment following strong results from other AI hardware names, said Stifel analyst Tore Svanberg. Marvell enables AI deployments that support demand for hyperscalers. The broad adoption of genAI is driving increased demand for custom chips, as enterprises advance their technology strategies and continue to expand AI workloads. "Our custom business is performing well and remains on track to grow in the second-half of the fiscal year compared to the first. However, we expect growth to be non-linear in the custom business, with the fourth quarter substantially stronger than the third," CEO Matt Murphy said on a post-earnings call. Persistent inflation and economic uncertainty have led customers to delay purchases, resulting in weak demand at Marvell's automotive and industrial and carrier infrastructure end markets. Chip giant Nvidia's CEO Jensen Huang on Wednesday dismissed concerns about an end to a spending boom on AI chips and said opportunities will expand into a multi-trillion-dollar market over the next five years. Nvidia said it sees revenue of $54 billion, plus or minus 2%, for the third quarter, compared with analysts' average estimate of $53.14 billion. Marvell expects quarterly revenue of $2.06 billion, plus or minus 5%, compared with analysts' average estimate of $2.11 billion, according to data compiled by LSEG. For the second quarter, ended August 2, Marvell posted revenue of $2.01 billion, in line with analysts' estimates. Revenue at the data center segment, Marvell's largest, grew 3% to $1.49 billion for the quarter, but fell short of estimates of $1.51 billion. Earlier in August, Marvell completed the sale of its automotive ethernet business to German chipmaker Infineon Technologies for about $2.5 billion in cash. (Reporting by Juby Babu in Mexico City; Editing by Alan Barona)