MW Marvell's stock sinks on earnings, showing Wall Street's harsh view of AI plays

By Emily Bary, Therese Poletti

Marvell beats expectations with its latest quarterly results and outlook, but that's not enough to lift the stock

Better-than-expected results and guidance from Marvell Technology Inc. weren't enough to help the stock Wednesday, showing that Wall Street continues to take a tougher look at artificial-intelligence names.

The semiconductor company expects $1.875 billion in revenue, at the midpoint, for its fiscal first quarter, which is slightly above the $1.865 billion FactSet consensus view.

But investors have been punishing once-hot AI stocks this year, and Marvell shares $(MRVL)$, which were already down 18% over the course of 2025 heading into Wednesday's report, look poised to extend their declines. They were off 14% in Wednesday's extended session.

In addition, Marvell said that a slowdown in its corporate on-premises portion of its data-center business is going to drag down the overall growth rate of AI, on a sequential basis. It expects its data-center business to be up about just 10% sequentially in the next quarter, compared to 24% sequential growth in the current quarter.

"The on-premise portion of our data center and market, we expect a seasonal sequential decline in revenue to partially offset growth from cloud and AI," Marvell Chief Executive Matt Murphy told analysts on a conference call. "As a result, we expect our overall data-center revenue to grow sequentially in the mid-single digits on a percentage basis." Later, after analysts asked for more clarity, Murphy said it would be "about 10%."

Marvell's data-center business is now about 75% of its total revenue. In the fourth quarter, data-center revenue was up 24% sequentially and up 78% from a year earlier.

Read: Trump hates the Biden-era Chips Act. What's next for semiconductor makers?

Prior to the report, Mizuho desk-based analyst Jordan Klein wrote that "funds are looking for any reason to REDUCE exposure and positions to the AI [semiconductor], hardware, optical, interconnect stocks right now." On Marvell specifically, he said many are still short the stock, with the view that "any beat and raise won't be good enough." There are fears about customer concentration as well as competition in Asia.

For the latest quarter, Marvell also delivered a slight beat on revenue. Sales for the fiscal fourth quarter amounted to $1.817 billion, whereas the FactSet consensus called for $1.799 billion.

"Our custom AI silicon programs have now entered volume production, and we continue to see strong growth from our interconnect products," Murphy said in a statement. "Marvell has secured multiple new design wins, including several custom silicon programs that will fuel future growth."

On the company's earnings call, many analysts were trying to get more information about the new custom design wins, their timing and how solid those design wins were. While Marvell declined to name its customers, citing confidentiality agreements, investors are aware that one of its big customers is Amazon.com $(AMZN)$, for its Trainium chips. In December, Marvell said it expanded its relationship with AWS to a five-year, multi-generational agreement.

Murphy said, in fact, that Marvell now has "custom engagements with all four of the major hyperscalers" and tried to assuage concerns that it may be facing competition for one particular customer. "We're very pleased with the ramp of our current lead CPU program," Murphy said, adding that he sees significant volume production on the current generation. "In parallel, we have been deeply engaged on the next generation of this AI CPU with this customer."

Among Marvell's other business categories, it recorded sequential revenue growth in everything except for the consumer segment, which was down 8%.

Marvell posted 60 cents in adjusted earnings per share for the fiscal fourth quarter, whereas analysts had been looking for 59 cents.

The company's outlook for the ongoing quarter calls for 61 cents in adjusted EPS, also a penny above the consensus view of 60 cents.

See also: Nvidia's stock is doing things not seen in nearly a decade - and that's good news

-Emily Bary -Therese Poletti

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March 05, 2025 18:53 ET (23:53 GMT)

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