Marvell Technology Plummets 4.4%: What's Behind the Sudden Sell-Off?

Summary
• Marvell Technology (MRVL) trades at $88.36, down 4.44% intraday
• Benchmark downgrades MRVL to 'Hold' amid Amazon Trainium design concerns
• Insider selling and competitive fears amplify near-term volatility
• Golden Cable initiative and AI chip adoption highlight long-term potential

Marvell Technology’s shares plunged over 4% in volatile trading on December 11, 2025, as a confluence of bearish catalysts—including a downgrade from Benchmark, insider selling, and competitive threats—collided with bullish product momentum. The stock’s intraday range of $87.51 to $91.74 underscores the tug-of-war between near-term risks and long-term AI-driven growth prospects.

Benchmark Downgrade and Competitive Concerns Trigger Sharp Selloff
The selloff was catalyzed by Benchmark’s downgrade of MRVL to 'Hold' following revelations that Marvell may have lost Amazon’s Trainium3 and Trainium4 chip designs to Taiwanese competitor Alchip. The firm cited 'high conviction' in Marvell’s near-term revenue risks despite management assurances of continued Trainium2 volumes. Compounding the issue, insider selling—most notably the EVP’s $126k sale of 1,253 shares—amplified short-term pessimism. Meanwhile, positive news like the Golden Cable AEC initiative and AI chip adoption by hyperscalers failed to offset immediate concerns about design wins and execution risks.

Semiconductor Sector Volatile as Broadcom Also Slides
The broader semiconductor sector mirrored MRVL’s volatility, with sector leader Broadcom (AVGO) down 2.1% intraday. However, MRVL’s decline outpaced peers due to its unique exposure to cloud design risks and insider selling. While the sector’s 14.5% Q3 growth (per Omdia) highlights AI-driven demand, MRVL’s near-term challenges—centered on Amazon and Microsoft relationships—created a steeper selloff than generalized sector weakness.

Bearish Options and Technical Levels to Watch in MRVL’s Volatile Environment
• MACD: 2.09 (above signal line 1.62), RSI: 62.34 (neutral), Bollinger Bands: 74.39–101.59 (current price near lower band)
• 200D MA: $73.79 (well below current price), 30D MA: $89.00 (resistance near $89)

MRVL’s technical profile suggests short-term bearish momentum, with RSI hovering near neutral and price testing the lower Bollinger Band. Key support levels at $87.50 (intraday low) and $85 (psychological level) are critical for near-term stability. The 200D MA at $73.79 remains a long-term floor, but near-term volatility favors options strategies.

Top Options Contracts:
• MRVL20251219P85 (Put):
- Strike: $85, Expiry: 12/19, IV: 48.66%, Leverage: 69.57%, Delta: -0.2886, Theta: -0.0127, Gamma: 0.0506, Turnover: 170,039
- IV (high volatility), Leverage (strong upside potential), Delta (moderate sensitivity), Gamma (high sensitivity to price swings)
- This put option offers aggressive bearish exposure with high leverage and gamma, ideal for a 5% downside scenario (projected payoff: $3.55). High turnover ensures liquidity.
• MRVL20251219P86 (Put):
- Strike: $86, Expiry: 12/19, IV: 50.17%, Leverage: 52.28%, Delta: -0.3466, Theta: -0.0034, Gamma: 0.0530, Turnover: 24,159
- IV (elevated), Leverage (moderate), Delta (higher sensitivity), Gamma (strong price responsiveness)
- This contract balances risk and reward, with a projected payoff of $2.55 in a 5% drop. The low theta suggests minimal time decay, preserving value for short-term bearish bets.

Action Insight: Aggressive bears should prioritize MRVL20251219P85 for maximum leverage, while MRVL20251219P86 offers a safer, more liquid alternative. Both contracts align with the stock’s bearish technical setup and near-term risks.

Backtest Marvell Technology Stock Performance
The backtest of MRVL's performance after an intraday plunge of -4% from 2022 to the present shows favorable short-to-medium-term gains. The 3-Day win rate is 54.18%, the 10-Day win rate is 53.35%, and the 30-Day win rate is 59.62%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 6.64%, which occurred on day 59, suggesting that MRVL can generate decent gains even after a significant intraday dip.

MRVL’s Volatility Warrants Cautious Positioning Amid Mixed Signals
Marvell’s sharp selloff reflects immediate risks to its cloud design pipeline and insider sentiment, but long-term AI infrastructure growth remains intact. The stock’s technical indicators and options activity suggest a near-term bearish bias, with critical support at $85 and $87.50. Investors should monitor Amazon/Microsoft design updates and institutional flows for clarity. With sector leader Broadcom (AVGO) down 2.1%, the broader semiconductor environment remains volatile. Act now: Consider MRVL20251219P85 for bearish exposure if $85 support breaks, while holding for long-term AI-driven recovery.