Highlights;
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Stock Performance: Marvell’s stock fell 18% after reporting lower-than-expected data center revenue and weaker Q3 guidance.
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Earnings Overview: Adjusted EPS of 67¢ exceeded expectations (66¢), with revenue of $2.01B matching forecasts, though data center revenue was $1.49B, below the $1.51B estimate.
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Revenue Growth: Q2 revenue surged 58% year-over-year, a company record, driven by strong AI demand and a shift to profitability from a prior loss.
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Future Outlook: Management expects flat Q3 data center revenue but forecasts a stronger Q4. Analysts remain cautious, noting concerns over AI growth and insufficient visibility into the customer pipeline.
Marvell Technology Group Ltd.’s stock dropped 18% on Friday following the release of its quarterly earnings report, which showed weaker-than-expected data center revenue and underwhelming guidance for the current quarter. Here’s a summary of the key details:
Financial Highlights:
- Earnings per share (EPS): $0.67 adjusted (vs. $0.66 expected)
- Revenue: $2.01 billion (in line with expectations)
- The company reported a 58% year-over-year revenue increase in its fiscal Q2, ending August 2, driven by strong AI demand for its custom silicon and electro-optics products.
- Net income for the quarter was $194.8 million, or $0.22 per share, compared to a net loss of $193.3 million, or $0.22 per share, in the same period last year.
Guidance and Outlook:
- Marvell expects Q3 revenue to be $2.06 billion, plus or minus 5%, slightly below analyst estimates of $2.11 billion.
- CEO Matt Murphy noted that data center revenue is expected to remain flat in Q3 due to nonlinear growth in its custom AI chip business, but growth in Q4 is anticipated to be “substantially stronger.”
- Murphy attributed the “lumpiness” in guidance to the infrastructure build-out by large hyperscalers.
Data Center Performance:
- Data center sales reached $1.49 billion, falling short of the $1.51 billion projected by Wall Street.
- Some investors expressed concerns about the lack of clarity regarding the company’s pipeline of new customers, making it difficult to underwrite Marvell’s 20% data center market share target.
Analyst Reactions:
- Analysts at Bank of America downgraded Marvell’s stock to neutral from buy, lowering their price target to $78 per share from $90, citing concerns about AI growth prospects in the near to medium term.
This report reflects a mixed outlook for Marvell, with strong revenue growth but challenges in meeting expectations and investor concerns about future growth prospects.
Source: https://www.cnbc.com/2025/08/29/marvell-stock-earnings-guidance.html
