TLDR
- Marvell Technology (MRVL) stock crashed 19% after issuing weaker Q3 guidance despite strong Q2 revenue growth of 58%
- Company reported Q2 revenue of $2.006 billion, slightly missing $2.01 billion consensus but beating year-over-year comparisons
- Q3 revenue guidance of $2.06 billion came below Street expectations of $2.11 billion, disappointing investors
- Multiple analysts downgraded ratings and cut price targets, with concerns about timing of major cloud projects
- Stock has fallen over 40% in 2025 and trades 50% below January highs, though maintains Strong Buy consensus rating
Marvell Technology shares tumbled 19% on Friday following the company’s second-quarter earnings report. The semiconductor company delivered mixed results that left investors focused on future prospects rather than recent gains.
The company reported adjusted earnings of $0.67 per share, matching analyst expectations perfectly. Revenue reached $2.006 billion for the quarter, falling just short of the $2.01 billion consensus estimate.
Despite the small revenue miss, Marvell showed strong year-over-year growth. Total revenue jumped 58% compared to the same quarter last year. The data center division drove much of this growth, with sales climbing 69% to $1.49 billion.
Data center operations now represent nearly three-quarters of Marvell’s total business. The segment has become the company’s primary growth driver as demand for AI infrastructure continues to expand.
However, the third-quarter outlook dampened investor enthusiasm. Marvell projected Q3 revenue of $2.06 billion, plus or minus 5%. This guidance fell below Wall Street’s target of $2.11 billion.
Analyst Reactions and Downgrades
The weaker forecast prompted several major banks to adjust their positions on Marvell stock. Bank of America analyst Vivek Arya downgraded the stock from Buy to Neutral. He also reduced his price target from $90 to $78.
UBS analyst Quinn Bolton maintained his Buy rating but cut his price target from $85 to $80. Morgan Stanley’s Joseph Moore lowered his target from $80 to $76 while keeping a Hold rating.
These analyst moves reflected concerns about the timing of major cloud infrastructure projects. Delays in Microsoft’s Maia accelerator and Amazon’s next-generation chip deployments weighed on near-term expectations.
During the earnings call, CEO Matt Murphy addressed the guidance. He noted that demand for custom silicon and electro-optics products remains robust. The company currently has more than 50 new AI design projects in development.
Murphy acknowledged that deployment timing would affect near-term results. Data center sales are expected to remain flat in the coming quarter before showing improvement later in the year.
Financial Performance and Market Position
Marvell maintained healthy operational metrics despite the stock decline. The company generated $461.6 million in operating cash flow during the quarter. Gross margins held steady at 59.4%, showing pricing discipline in a competitive market.
The stock’s Friday decline extended a challenging year for shareholders. Marvell shares have dropped more than 40% in 2025. The stock now trades about 50% below its January peak of $126.06.
Despite the recent selloff, Wall Street maintains an optimistic long-term view. Analysts continue to rate Marvell as a Strong Buy overall. The average price target stands at $88.52, suggesting potential upside of 40.81% from current levels.
Investors are now looking ahead to fourth-quarter results and beyond. Key partnerships with Amazon and Microsoft could provide stronger growth momentum. The success of these collaborations will likely determine whether Marvell can return to its previous highs.
The company’s heavy investment in research and development continues. R&D expenses reached $962.8 million in the recent quarter, reflecting ongoing commitments to innovation in AI and data center technologies.
