Marvell Technology Earnings Preview: AI Growth and Custom Silicon Demand in Focus
3min read Marvell Technology is set to report its fiscal fourth-quarter 2025 earnings after the market closes on March 5, 2025, with a conference call scheduled for 4:45 PM ET. Wall Street expects the semiconductor company to post adjusted earnings per share of $0.59, within a range of $0.50 to $0.62, and revenue of $1.8 billion, marking an expected 26.5 percent year-over-year increase. Investors will be closely watching the company’s outlook on AI-driven semiconductor demand, networking chips, and custom silicon growth, as well as its positioning in the rapidly evolving data center infrastructure market.
Key Drivers to Watch
AI continues to be the dominant growth narrative for marvell, with analysts expecting the company’s AI-related revenue to significantly exceed prior targets. oppenheimer notes that Marvell’s AI ASIC sales could top $3 billion this year, led by its AWS Trainium partnership. AI networking remains a key growth driver, and evercore ISI sees upside potential in Marvell’s optical interconnect sales, which are widely used in Nvidia’s AI data center racks.
Another key focus is capital expenditure trends from hyperscalers such as Amazon, Microsoft, Google, and Meta, which are projected to increase spending by 40 percent in 2025 to approximately $325 billion. Analysts see this surge in investment as a tailwind for Marvell, given its strategic partnerships and custom silicon offerings.
Beyond AI, Marvell is expected to benefit from a cyclical recovery in non-AI segments, particularly in carrier and enterprise networking. Deutsche Bank anticipates sequential growth in these areas and expects the company to reiterate confidence in multi-year AI-driven growth. However, the firm also notes that investor concerns about the sustainability of AI demand remain an ongoing debate.
Analyst Sentiment and Stock Performance
Marvell enters its earnings report with strong support from analysts, maintaining a consensus rating of buy and an average price target of $127. Some firms are even more bullish, with Bank of America setting a $150 price target and Melius recently initiating a buy rating with a $188 target, citing Marvell’s potential to secure 20 percent of the custom AI accelerator market.
Susquehanna raised its price target to $140, highlighting the company's upbeat tone on AI opportunities and next-generation semiconductor advancements. Citi also reiterated its buy rating with a $136 target, expressing confidence in Marvell’s long-term AI silicon market expansion, including its projected $8 billion-plus revenue in 2028 from custom ASICs.
Despite these optimistic outlooks, Marvell’s stock has declined 16.8 percent year-to-date, underperforming the broader semiconductor sector, which has faced valuation pressure amid shifting AI investment sentiment. However, analysts see potential for the stock to rebound if earnings results and guidance exceed expectations.
What to Expect from the Earnings Report
Marvell’s fourth-quarter revenue guidance was set at $1.8 billion, plus or minus 5 percent, which aligns with analyst estimates. The company expects non-GAAP EPS of $0.59, plus or minus $0.05, a 28.5 percent increase year-over-year.
Historically, Marvell has a strong track record of beating expectations, having surpassed EPS estimates in three of the last four quarters, with an average 3.8 percent earnings surprise. The company has also beaten revenue estimates 75 percent of the time in the past two years, indicating positive momentum heading into this report.
Analysts expect Marvell’s data center revenue to continue driving double-digit growth, fueled by demand for AI computing, networking, and custom silicon solutions. Deutsche Bank predicts gross margins may face slight compression as custom AI chip sales ramp up, with an expected 50 basis point decline in both the fourth and first quarter to around 60 percent. However, strong operating leverage should drive margin expansion in the long term, with operating margins projected to reach the low 30 percent range near-term and grow toward 40 percent over time.
Key Trends and Forward Outlook
One of the biggest debates around Marvell’s earnings is whether AI demand will remain as strong as expected in 2025 and beyond. Citi notes that investors are particularly focused on whether Amazon, Google, and Microsoft will maintain aggressive spending levels on custom AI chips and whether Marvell can continue to gain market share in this space.
Additionally, analysts are closely watching whether Marvell increases its total addressable market projection for custom silicon at its upcoming June analyst day, similar to what Broadcom recently did. The company's current $43 billion total addressable market estimate for 2028 could be revised higher, given stronger-than-expected cloud capital expenditure spending and AI attach rates.
Other segments, such as automotive and industrial semiconductors, remain steady revenue contributors, benefiting from the increased semiconductor content in electric vehicles and industrial automation growth. However, consumer end markets remain weak, with gaming-related semiconductor revenue expected to decline 15 percent sequentially, according to analyst estimates.
Market Expectations and Stock Reaction
The options market is pricing in an 11.3 percent post-earnings move, reflecting significant uncertainty around Marvell’s guidance and AI commentary. Given the high investor expectations, a slight miss or cautious outlook could trigger further downside in the stock, while a strong guide with increased AI revenue projections could drive a sharp rebounds.
Marvell’s long-term growth story remains intact, driven by AI, data center networking, and custom silicon solutions. If the company delivers strong fourth-quarter results and reassures investors about AI sustainability, it could regain investor confidence and reverse recent underperformance. However, near-term stock movement will likely depend on the strength of guidance for the next two quarters, particularly regarding AI-driven revenue expansion and margin trends.
Final Thoughts
Marvell’s upcoming earnings report will provide critical insights into AI semiconductor demand, data center spending trends, and the company’s position in the custom silicon market. While the stock has struggled in 2025, many analysts remain optimistic about its long-term AI-driven growth trajectory. Investors should pay close attention to guidance on AI revenue, gross margin trends, and any updates on Marvell’s long-term growth projections.