Marvell Technology (NASDAQ:MRVL) shares tumbled Friday after the chipmaker’s upbeat second-quarter results were overshadowed by underwhelming third-quarter guidance, prompting Wall Street to trim price forecasts and deepening investor concerns over the near-term outlook.
Marvell posted adjusted earnings of 67 cents per share, edging past Wall Street’s forecast of 66 cents. Revenue came in at $2.006 billion, just shy of the $2.009 billion consensus estimate. Adjusted gross margin was 59.4%, reflecting resilient AI-focused sales.
“Marvell delivered record revenue of $2.006 billion in the second quarter, a 58% year-over-year increase, and we expect continued growth into the third quarter, accompanied by operating margin and earnings per share expansion,” said Matt Murphy, Marvell’s Chairman and CEO.
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“Marvell’s growth is being fueled by strong AI demand for our custom silicon and electro-optics products, as well as a significant increase in the pace of recovery in our enterprise networking and carrier infrastructure end markets,” Murphy added.
For the third quarter, Marvell expects revenue between $1.957 billion and $2.163 billion (vs. $2.105 billion estimate) and adjusted EPS of 69 cents to 79 cents (versus 72 cents estimate).
Analysts responded by trimming price forecasts, citing both near-term headwinds and long-term opportunities.
Kevin Cassidy of Rosenblatt Securities described Marvell’s results as mixed, noting that data center ASIC shipment adjustments between October and January contributed to a slight revenue shortfall, even as earnings came in ahead of expectations.
Looking ahead, the firm lowered its fiscal 2027 revenue outlook to reflect the divestiture of Marvell’s Automotive Ethernet business and softer data center shipments.
Despite the near-term revisions, Rosenblatt maintained a Buy rating, citing a strong pipeline of 18 upcoming ASICs and more than 50 additional design opportunities that it believes will diversify revenue and reduce customer concentration. The firm cut its 12-month price forecast to $95 from $124.
JP Morgan analyst Harlan Sur said Marvell’s July-quarter results were in line, as stronger consumer demand offset softer data center and carrier sales. The analyst noted that the October-quarter guidance of $2.06 billion was broadly in line after accounting for the Automotive Ethernet divestiture.
The firm expects flat data center revenue, with optical networking growth offset by uneven custom ASIC shipments, which should reaccelerate in 2026. Carrier and enterprise networking sales are projected to climb 30% sequentially.
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