Marvell Stock Drops Despite Strong Earnings as Outlook Fails to Impress

Marvell Technology Inc. (MRVL) shares fell 14.7% on March 5, 2025, despite reporting strong fourth-quarter earnings, as investors were unimpressed by the company's guidance for the first quarter of fiscal 2026. The semiconductor giant reported net revenue of $1.817 billion for the fourth quarter of fiscal 2025, up 27% year-over-year, and non-GAAP diluted net income per share of $0.60, beating analyst estimates. However, the stock price dropped as investors focused on the company's guidance for the first quarter of fiscal 2026, which indicated a revenue growth of over 60 percent year-over-year at the mid-point of guidance, lower than the previous quarter's growth rate of 78% year-over-year.



Marvell's guidance for the first quarter of fiscal 2026 also included a lower GAAP diluted net income per share of $0.19 +/- $0.05 per share, compared to the non-GAAP diluted net income per share of $0.61 +/- $0.05 per share. Additionally, the company's expected GAAP operating expenses for the first quarter of fiscal 2026 were approximately $712 million, higher than the non-GAAP operating expenses of approximately $490 million. These factors likely contributed to investors' concerns about the company's cost control and efficiency.

Analysts and investors were expecting a higher growth rate and better profitability for the first quarter of fiscal 2026, given the strong performance in the previous quarter and the company's optimistic outlook for the full fiscal year. However, the lower-than-expected revenue growth and profitability may have raised concerns about Marvell's future prospects and its ability to maintain its momentum in the semiconductor market.

Marvell's CEO, Matt Murphy, acknowledged the market's reaction to the company's guidance, stating, "Our custom AI silicon programs have now entered volume production, and we continue to see strong growth from our interconnect products. Marvell has secured multiple new design wins, including several custom silicon programs that will fuel future growth. We are well positioned for a strong start to fiscal 2026." However, investors may have been disappointed by the company's guidance and the subsequent stock price drop.



In conclusion, Marvell's strong fourth-quarter earnings were overshadowed by the company's guidance for the first quarter of fiscal 2026, which indicated a lower growth rate and profitability. Investors were expecting a higher growth rate and better profitability, given the company's strong performance in the previous quarter and its optimistic outlook for the full fiscal year. The subsequent stock price drop may reflect investors' concerns about Marvell's future prospects and its ability to maintain its momentum in the semiconductor market. As the company continues to execute on its growth strategy, investors will be watching closely to see if Marvell can regain their confidence and drive the stock price higher.