Marvell Technology Falls as Q4 Results and Outlook Fail to Impress

Marvell Technology (MRVL) delivered mixed Q4 earnings, narrowly exceeding expectations on both revenue and earnings per share (EPS) but failing to meet the high bar set by the AI-driven semiconductor space. The company reported adjusted EPS of $0.60, slightly ahead of the $0.59 consensus estimate, while revenue reached $1.82 billion, surpassing expectations of $1.80 billion. Despite strong year-over-year growth of 27 percent, shares of
tumbled more than 14 percent in after-hours trading, as investors reacted to a guidance outlook that failed to impress amid sky-high expectations in the AI sector.Data Center Strength Offsets Weakness in Other Segments
Marvell’s data center business was the standout performer, generating $1.37 billion in revenue, up 78 percent year over year, and in line with estimates. This strength came largely from AI-driven demand, particularly from hyperscalers such as
Web Services. However, while AI-related revenues remain on an upward trajectory, Marvell’s non-AI data center business showed signs of slowing, impacting overall growth projections.Other segments showed mixed results:
- Consumer revenue: $88.7 million (-38 percent year over year), beating estimates of $83.8 million.
- Carrier infrastructure revenue: $105.8 million (-38 percent year over year), above estimates of $97 million.
- Enterprise networking revenue: $171.4 million (-35 percent year over year), in line with estimates of $172.7 million.
- Automotive/Industrial revenue: $85.7 million (+4.1 percent year over year), matching expectations.
Despite the strong data center performance, the broad declines in other segments highlight the challenges
faces outside of AI-driven revenue streams.Guidance Disappoints in a High-Expectation AI Market
For fiscal Q1 2025, Marvell guided revenue to $1.875 billion (±5 percent), closely matching the $1.87 billion analyst estimate. EPS guidance came in at $0.61 (±$0.05), just above expectations of $0.60. While this guidance was not a major miss, it also was not enough to satisfy investors in a market punishing anything short of perfection, particularly in the AI semiconductor space.
Barclays noted that while management remains confident in Marvell’s long-term AI prospects, near-term numbers, especially from AWS, came in a bit lighter than expected, which weighed on sentiment. Analysts also pointed out that recent AI-exposed semiconductor firms, such as Credo and Arteris, had significantly beaten expectations, raising the bar for companies like Marvell.
Key Drivers Behind the Results
Marvell’s strong AI-driven growth stems from custom ASIC chips and optical interconnects, which are integral to high-performance computing and hyperscale data centers. However, some analysts noted that the expected AI ramp in 2026 is still heavily reliant on AWS, with Microsoft being a longer-term opportunity in late 2026.
Wolfe Research highlighted investor concerns about whether Marvell lost a key next-generation custom XPU project at AWS to Alchip. However, Marvell addressed this speculation directly, confirming they are fully engaged on follow-on projects and expect AWS revenue to continue growing into fiscal 2026 and 2027.
Despite this reassurance, KeyBanc pointed out that Marvell likely lost Trainium 3 to Annapurna Labs and Alchip, though they maintained that next-gen Trainium 2.5 (Ultra) remains in Marvell’s portfolio.
Analyst Reactions: Price Targets Lowered but Long-Term Confidence Remains
While analysts remain broadly positive on Marvell’s long-term AI trajectory, many lowered their price targets following the earnings report:
- Barclays: Lowered PT from $150 to $130, maintained Overweight.
- Wolfe Research: Cut PT from $130 to $115, maintained Outperform.
- Piper Sandler: Reduced PT from $120 to $95, maintained Overweight.
- Deutsche Bank (DBAB): Reiterated Buy, with PT at $120.
- KeyBanc: Lowered PT from $135 to $115, maintained Overweight.
Barclays analysts pointed out that while AI chip concerns may be overblown, custom silicon trends remain strong, and co-packaged optics (CPO) presents a near-term positive. They suggested that investors should revisit the stock once AI-related volatility stabilizes.
Deutsche Bank analysts took a more bullish stance, reiterating their Buy rating despite investor disappointment in the near-term guide. They noted Marvell remains on track for its long-term target of $15 billion in data center revenue by 2028 and suggested that a long-term EPS power of $7-8 remains feasible.
Conclusion: Strong Growth, but Expectations Were Too High
Marvell’s Q4 results were not necessarily weak, but they were not strong enough to satisfy investors expecting significant AI-driven upside. While data center revenue surged 78 percent year over year, guidance was merely in line, failing to excite a market that has significantly raised expectations for AI-exposed stocks.
Long-term AI growth remains intact, with custom ASICs and optical interconnects driving future gains, but investor patience may be tested in the near term. As AI volatility continues, analysts see Marvell as a name that could rebound once the market stabilizes, particularly given its strong positioning in custom silicon and data center networking.
For now, though, Marvell’s stock is facing the reality of an unforgiving market that expects AI names to consistently overdeliver—not just meet expectations.
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