Marvell Technology Stock Plummets 16% After Disappointing Data Center Revenue and Forecast
Santa Clara, CA – August 30, 2025, Marvell Technology, Inc. (NASDAQ: MRVL) saw its stock plunge 16% on Friday, August 29, 2025, following a second-quarter earnings report that revealed underwhelming data center revenue and a lackluster forecast for the fiscal third quarter. The artificial intelligence (AI) chipmaker, known for its custom silicon and electro-optics products used by cloud giants like Amazon and Microsoft, reported data center sales of $1.49 billion for the quarter ending August 2, missing Wall Street’s estimate of $1.51 billion. The company’s third-quarter revenue guidance of $2.06 billion, plus or minus 5%, also fell short of analysts’ expectations of $2.11 billion, according to LSEG data.
As shown in the finance card above, Marvell’s stock closed at $62.84, down from the previous day’s close of $77.23, reflecting a significant market reaction. The stock has now declined 42% year-to-date in 2025, erasing much of the 198% rally seen in 2023 and 2024. The drop wiped out nearly $12 billion in market value, with the company’s market capitalization now standing at approximately $64.48 billion.
Despite reporting record revenue of $2.01 billion for the second quarter, a 58% year-over-year increase fueled by AI demand, Marvell’s performance failed to meet the high expectations set by the AI-driven market. CEO Matt Murphy attributed the shortfall to “lumpiness” in demand for custom application-specific integrated circuits (ASICs), noting that data center revenue is expected to remain flat sequentially in the third quarter. However, he expressed optimism about a “substantially stronger” fourth quarter, citing anticipated growth in custom chip orders.
Analysts expressed concern over Marvell’s near-term AI growth prospects. Bank of America downgraded the stock to neutral from buy, lowering its price target from $90 to $78, citing uncertainties in the company’s ability to sustain its 20% data center market share target. “The AI semiconductor boom is real, but Marvell’s ability to convert design wins into consistent revenue is under scrutiny,” noted an analyst from Summit Insights. Additional headwinds include reported delays in Microsoft’s in-house AI chip projects until 2028 or later and Amazon’s AWS losing ground to competitors like Microsoft Azure and Google Cloud, which could impact Marvell’s custom chip business.
The broader semiconductor sector also felt the ripple effects, with the VanEck Semiconductor ETF declining 4% on Friday. Marvell’s forward price-to-earnings ratio of 23.95 lags behind rival Broadcom’s 39.03, reflecting investor caution about its growth trajectory. Despite the setbacks, some analysts remain optimistic about Marvell’s long-term prospects, with an average 12-month price target of $100.03, suggesting a potential 28.41% upside from the current price, according to 30 analysts surveyed by StockAnalysis.com.
The company’s recent strategic moves, including the $2.5 billion sale of its automotive ethernet business to Infineon Technologies in August 2025, may provide financial flexibility to navigate these challenges. However, with high R&D costs (30% of revenue) and margin pressures, Marvell faces execution risks in a highly competitive AI chip market.
As investors await further clarity on Marvell’s AI strategy and customer pipeline, the company’s ability to capitalize on its design wins and deliver consistent growth will be critical to regaining market confidence.
Sources: CNBC, Reuters, Business Insider, SiliconANGLE, Investopedia, AInvest.com, StockAnalysis.com