Marvell Technology (NASDAQ: MRVL) has faced investor concerns over its next-generation custom AI chips for major clients like Amazon and Microsoft, as well as broader macroeconomic uncertainties tied to U.S. trade policies and AI infrastructure spending. Despite beating Q1 fiscal 2026 estimates with revenue of $1.9 billion (up 41% year-over-year) and adjusted EPS of $0.62 against an expected $0.61, the stock fell 4% in pre-market trading on May 30, 2025, closing at $60.19, down from the previous day’s close of $63.73, as shown in the finance card above.
The company’s efforts to address investor fears centered on its custom silicon business, which now accounts for 73% of Q3 revenues, driven by partnerships with Amazon AWS for Trainium and Inferentia ASICs and optical interconnect products. However, a tepid revenue forecast of $1.875 billion for Q1 fiscal 2026, only slightly above the $1.88 billion consensus, and a projected adjusted gross margin of 60% (down over two points year-over-year) failed to meet high investor expectations for AI-driven growth.
Additional pressures include a slowdown in demand for Marvell’s core networking equipment, like ethernet cables and fiber channels, as Big Tech shifts spending to AI chips, alongside Trump’s tariffs on countries like China, which have disrupted the chip sector. The Philadelphia Semiconductor Index is down 5% in 2025, reflecting broader sector challenges. Marvell’s stock has also been volatile, dropping 50% from its January 2025 high of $112.86, as shown in the finance card, amid fears sparked by Chinese AI startup DeepSeek’s low-cost breakthroughs.
Posts on X highlight ongoing investor skepticism, with some noting concerns about Marvell’s relationship with Amazon and the broader AI spending outlook. Despite Marvell’s strong AI revenue growth and design wins, the stock’s slump suggests doubts persist about its ability to sustain margins and capitalize on AI demand in a competitive and geopolitically volatile environment.
