Marvell Tech Beats Expectations But Fails To Impress Market

Marvell Technology exceeded Wall Street’s expectations, but not enough to satisfy the highest forecasts, as AI-related stocks continue to face intense scrutiny for anything short of perfection.

Marvell specializes in chips and hardware for data centers, 5G infrastructure, networking, and storage markets. I Photo: Marvell Technology

While the company’s revenue guidance came in above expectations at the midpoint, it fell short of the highest analyst estimates, leading to a sharp 16% drop in after-hours trading, Barron’s Daily reported.

For the current quarter ending in April, Marvell forecasted revenue of $1.875 billion at the midpoint, compared to analysts' consensus expectation of $1.87 billion.

However, the highest analyst estimate projected first-quarter revenue exceeding $1.97 billion, according to FactSet. Marvell specializes in chips and hardware for data centers, 5G infrastructure, networking, and storage markets. It also helps major tech firms design custom AI semiconductors.

In the fourth quarter, Marvell posted revenue of $1.82 billion and adjusted earnings of 60 cents per share, both surpassing expectations.

Data center revenue saw strong growth, rising 24% from the previous quarter and 78% year-over-year. Amazon.com, one of the so-called hyperscalers, is among Marvell’s largest customers, Bloomberg reported.

Among the company’s other business segments, revenue increased across all categories except consumer, which declined 8%. Overall, Marvell’s fourth-quarter revenue grew 27% year-over-year.

Raymond James analyst Srini Pajjuri remains optimistic about Marvell’s prospects, citing its strong intellectual property, system-level expertise, and execution track record. He expects the custom AI accelerator market to exceed $50 billion by 2028.