Matt Murphy, CEO of Marvell Technology.
Scott Mlyn | CNBC
Marvell Technology shares plummeted 19.8% after the chipmaker’s guidance fell short of some elevated buyside estimates.
For the first fiscal quarter, the chipmaker said it expects sales of about $1.88 billion. That was just ahead of the $1.87 billion expected by analysts polled by LSEG. However, the outlook fell short of some buyside expectations calling for around $2 billion in revenue, disappointing investors after the stock soared 83% in 2024.
The results fueled some concerns about Marvell’s partnership with Amazon Web Services on its Trainium AI chip, and the potential lack of upside for Marvell’s custom application-specific integrated circuits business.
“Solid numbers missed the high watermark set by the rest of the AMZN supply chain,” wrote Barclays analyst Tom O’Malley in a note after the report. “While the company continues to sound good re: the future of their ASIC prospects, the AMZN numbers near term are a bit lower, which is the real sticking point for a market punishing anything not perfect in AI.”
Marvell is known for creating customized chips and hardware used in data centers, networking and infrastructure. The company has benefited from the artificial intelligence boon that has lifted the sector, but chipmakers now face elevated expectations for financial performance.
For the fourth quarter, Marvell reported adjusted earnings per share of 60 cents and revenue of $1.82 billion. That was slightly ahead of the earnings per share estimate of 59 cents and $1.80 billion revenue prediction, according to LSEG.
Data centers revenue came in at $1.37 billion, beating the $1.36 billion average estimate.
Other semiconductor stocks slumped alongside Marvell, with the VanEck Semiconductor ETF last down 4%. AI chip leader Nvidia and Broadcom dropped more than 5% each. Taiwan Semiconductor fell nearly 4%.
— CNBC’s Kristina Partsinevelos contributed reporting.
