Marvell Technology Plummets 4.57% Amid Semiconductor Sector Turbulence – What’s Brewing in the Silicon Valley?

Summary
• Marvell Technology (MRVL) slumps 4.57% to $88.24, its lowest since December 2023
• Intraday swing of $14.23 (15.6%) highlights extreme volatility
• Sector news: China’s AI chip IPOs and U.S.-China tech tensions dominate headlines
• Options frenzy: 708 contracts traded for MRVL20251219C92, the most active put/call pair

Marvell Technology’s sharp selloff has ignited a firestorm in the semiconductor sector, with traders scrambling to parse the implications of China’s AI chip ambitions and U.S. export controls. The stock’s 4.57% drop—its worst intraday performance since 2023—has drawn attention to its technical breakdown below key moving averages and the surge in put options betting on further declines.

Geopolitical Tensions and AI Chip Rivalry Drive MRVL’s Sharp Decline
The selloff in MRVL is directly tied to the intensifying U.S.-China tech rivalry, as evidenced by recent sector news. Baidu’s planned Hong Kong spin-off of its Kunlunxin chip unit and Huawei’s 2-nm chip breakthroughs signal China’s aggressive push to reduce reliance on U.S. semiconductor technology. Meanwhile, the U.S. Senate’s SAFE CHIPS Act aims to restrict Trump’s ability to ease AI chip export controls, creating regulatory uncertainty. These developments have triggered a sector-wide selloff, with MRVL’s 4.57% drop mirroring Nvidia’s 2.9% decline as investors reassess exposure to AI-driven growth stories.

Semiconductor Sector Volatility Intensifies as China’s AI Ambitions Challenge US Dominance
The semiconductor sector is in turmoil as China’s AI chipmakers gain momentum. Moore Threads’ 468% IPO surge and Zhonghao Xinying’s tensor processing unit (TPU) race against Google highlight the sector’s bifurcation. While MRVL’s 4.57% drop reflects near-term geopolitical risks, sector leader Nvidia’s 2.9% decline suggests broader caution. The sector’s 52-week high of $127.48 for MRVL contrasts with its 52-week low of $47.08, underscoring the volatility of a market caught between U.S. export curbs and China’s homegrown innovation push.

Options Playbook: High-Leverage Puts and Calls for MRVL’s Volatile Outlook
• MACD: 2.09 (bullish divergence), Signal Line: 1.62, Histogram: 0.47
• RSI: 62.34 (neutral), Bollinger Bands: $74.39–$101.60
• 200D MA: $73.79 (below current price), 30D MA: $89.00 (resistance)

MRVL’s technicals suggest a short-term bearish trend amid long-term bullish fundamentals. The stock is trading near its 200D MA support at $75.81, with Bollinger Bands indicating a potential rebound from the lower band. For options traders, the MRVL20251219P85 put and MRVL20251219C86 call stand out:

• MRVL20251219P85 (Put): Strike $85, Expiry 12/19, IV 50.55%, Leverage 64.97%, Delta -0.2948, Theta -0.0163, Gamma 0.0492, Turnover $89,116
- High leverage and moderate delta position this put to capitalize on a 5% downside (target $83.83), with theta decay favoring short-term bearish bets.
• MRVL20251219C86 (Call): Strike $86, Expiry 12/19, IV 45.52%, Leverage 22.71%, Delta 0.6653, Theta -0.3624, Gamma 0.0577, Turnover $12,549
- Strong delta and gamma make this call responsive to a rebound above $87.99 (30D MA), with theta decay accelerating as expiration nears.

If MRVL breaks below $87.51 (intraday low), the P85 put could see exponential gains. Conversely, a bounce above $91.74 (intraday high) may validate the C86 call’s theta decay advantage. Aggressive bulls may consider the C86 into a retest of the 30D MA at $89.00.

Backtest Marvell Technology Stock Performance
The backtest of MRVL's performance after an intraday plunge of -5% 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 was 6.67% over 59 days, suggesting that MRVL can generate decent gains even after a significant intraday decline.

MRVL’s Crossroads: Navigating AI’s Future Amid Geopolitical Crossfire
Marvell Technology’s 4.57% drop reflects the sector’s precarious position between U.S. export controls and China’s AI chip surge. While technicals suggest a short-term bearish bias, the stock’s long-term K-line pattern remains bullish. Investors should monitor the 200D MA at $73.79 as a critical support level and the 30D MA at $89.00 for potential reversals. With sector leader Nvidia down 2.9%, the path of least resistance for MRVL appears downward in the near term. Watch for a breakdown below $87.51 or a regulatory shift in U.S.-China tech relations to dictate next steps.