Marvell Technology, Inc.

NASDAQ Global Select
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Somewhat Bearish -35

Marvell shares tumble 6% as outlook underwhelms despite 37% revenue growth - cnbc.com

AI-generated analysis

📉 Marvell shares dropped 6% on Friday despite reporting a second-quarter revenue beat of $2.7 billion, which was 37% higher than the prior year.

💰 The company raised its fiscal 2028 revenue guidance to approximately $18 billion, yet this increase still fell short of investor expectations fueled by recent news.

🚀 Data center revenue growth accelerated significantly to 46% year-over-year, driven by exceptionally robust demand for AI-related products.

🤝 Marvell announced a major partnership with Google involving the purchase of up to 58.97 million shares at $206.58 each through fiscal 2033.

📊 The new Google deal covers specific hardware including AI inference chips, storage controllers, and network interface controllers for TPU systems.

🗣️ CEO Matt Murphy emphasized that AI-related bookings remain strong and expects revenue growth to continue accelerating through the rest of fiscal 2027.

⚖️ Goldman Sachs analysts maintained a neutral rating, citing high valuations relative to peers and uncertainty about adding more custom-chip customers.

Bullish Signals
  • Marvell reported second-quarter revenue of $2.7 billion, representing a 37% year-over-year increase that beat the company's previous guidance.
  • Revenue growth in the data center portfolio accelerated to 46% year-over-year, indicating strong demand for the company's networking and connectivity chips.
  • CEO Matt Murphy stated that AI-related bookings remain exceptionally robust and expects revenue growth to accelerate further through the remainder of fiscal 2027.
  • The company secured a significant long-term agreement with Google to supply up to 58.97 million shares worth up to $12.2 billion for use in TPU systems.
Risk Factors
  • Marvell shares fell 6% as the raised fiscal 2028 revenue outlook of $18 billion failed to meet investors' elevated expectations.
  • Analysts noted that high investor expectations were already priced in due to robust spending at key customers and the previously disclosed Google relationship.
Full Analysis
Marvell Technology reported a strong second-quarter revenue beat, with earnings rising 37% year-over-year to $2.7 billion, surpassing the company's previous guidance of $16.5 billion for the fiscal period. Despite this operational success, shares fell approximately 6% on Friday as investors reacted negatively to the company's fiscal 2028 outlook, which failed to meet elevated expectations driven by a recent strategic partnership with Google. The chipmaker, a key supplier of networking and connectivity solutions for AI data centers, highlighted that revenue growth in its data center portfolio accelerated to 46% year-over-year. CEO Matt Murphy stated that AI-related bookings remain exceptionally robust and expects further acceleration through the remainder of fiscal 2027, though he offered limited detail on the long-term fiscal 2028 projections. A major factor influencing investor sentiment was a new agreement with Google, which allows the tech giant to purchase up to 58.97 million Marvell shares at $206.58 each through fiscal 2033. While this deal is valued at up to $12.2 billion and covers products compatible with Google's TPU systems, analysts noted that high expectations were already priced in, leading to a sell-off when the long-term outlook did not fully align with market hopes.