By Tae Kim

Marvell Technology stock fell sharply in early trading Thursday after the company posted slightly better-than-expected earnings, but failed to impress investors who wanted more upside. The results were also dragging on the broader tech sector.

For its fiscal fourth quarter ending in January, the company reported revenue of $1.82 billion versus the consensus of $1.8 billion among analysts tracked by FactSet. Adjusted earnings came in at 60 cents per share, compared with the 59 cents analysts' consensus estimate.

Guidance was roughly in line with expectations. For the current quarter, Marvell told investors to expect revenue in a range with a midpoint of $1.875 billion, compared with analysts' expectations of $1.87 billion.

"Our custom AI silicon programs have now entered volume production, and we continue to see strong growth from our interconnect products," Marvell CEO Matt Murphy said in the earnings release. "We anticipate strong revenue growth for the full fiscal year."

Investors were apparently hoping for more. Marvell shares were down 19% at $73.26 in early trading Thursday following the earnings report on late Wednesday. If shares close at that level, it would be their lowest since Oct. 10 when they closed at $72.54, according to Dow Jones Market Data.

The iShares Semiconductor exchange-traded fund was down 3.4%, and the Nasdaq Composite was down off 1.5%.

Marvell stock had gained 15% over the past 12 months but is down 41% from its all-time closing high of $126.06 set on Jan. 23, according to Dow Jones Market Data.

"The modest upside to estimates is clearly a disappointment vs. elevated expectations for [ Amazon chip revenue] heading into the print," Jefferies analyst Blayne Curtis wrote in a note to clients Thursday. "We still believe there is a great deal of upside if you believe Marvell retains [the Amazon] Trainium [AI chip contract going forward]."

Morgan Stanley analyst Joseph Moore expected better results too. "We were wrong about the quarter, as we thought that Trainium 2 builds would surpass expectations, but they were in line," he wrote.

Marvell sells a portfolio of chips and hardware products for the data center, 5G infrastructure, networking, and storage markets. It also helps large technology companies design their own AI semiconductors, called ASICS, or application specific integrated circuits.

Another chipmaker, Broadcom, reports earnings after the market close. Shares of that firm were down 4.6% in early trading.

Write to Tae Kim at tae.kim@barrons.com

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March 06, 2025 09:56 ET (14:56 GMT)

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