Marvell reports EPS in-line, revs in-line; guides Q3 EPS in-line, revs in-line
Reports Q2 (Jul) earnings of $0.67 per share, excluding non-recurring items, in-line with the FactSet Consensus of $0.67; revenues rose 57.6% year/year to $2.01 bln vs the $2.01 bln FactSet Consensus. Co issues in-line guidance for Q3 (Oct), sees EPS of $0.69-0.79, excluding non-recurring items, vs. $0.72 FactSet Consensus; sees Q3 revs of $1.957-2.163 bln vs. $2.11 bln FactSet Consensus.
MW Marvell's stock is falling as its earnings didn't live up to the AI hype
+3.26%
By Britney Nguyen
The chip company says its record revenue of $2 billion was driven by AI demand for its custom chips, but Marvell doesn't deliver upside on its top line
Marvell's stock is down 30% so far this year.
Shares of Marvell Technology Inc. were falling in after-hours trading on Thursday after the company failed to top expectations with its latest results or offer upside with its guidance.
While Marvell (MRVL) was once seen as a darling of the artificial-intelligence trade, the company has struggled to live up to expectations this year, and shares had already fallen 30% on a year-to-date basis in the lead-up to Thursday's report.
The chip company's July-quarter revenue came in at $2.01 billion - a 58% increase from the year-before quarter, but only in line with Wall Street's expectations based on the FactSet consensus. Marvell reported adjusted earnings of 67 cents per share in the second quarter, which also matched analysts' estimates.
Still, it was record revenue for the company, Chief Executive Matt Murphy said in a statement. The company expects growth to continue into the third quarter, Murphy said, alongside expansion of its operating margin and earnings per share.
"Marvell's growth is being fueled by strong AI demand for our custom silicon and electro-optics products, as well as a significant increase in the pace of recovery in our enterprise networking and carrier infrastructure end markets," Murphy said.
He added that the company's "custom AI-design activity is at an all-time high" and that the company is "engaged in over 50 new opportunities across more than 10 customers."
Marvell set fiscal third-quarter guidance at $2.06 billion, plus or minus 5%, which is slightly below the $2.11 billion analysts tracked by FactSet were modeling.
The stock's drop so far this year "reflects the high expectations built into AI chip names, stretched valuations that left little margin for error earlier in the year, and added uncertainty from" the company's exposure to geopolitical tensions with China and broader macroeconomic risks, Ethan Feller, a stock strategist at Zacks Investment Research, said ahead of the company's earnings report.
Still, Feller said the chip company "is positioned as an attractive way to play the AI boom," because of its application-specific integrated circuits, which it offers to hyperscalers, and its opportunities in networking and cloud infrastructure.
While Morgan Stanley analysts said ahead of the report that they expected Marvell to be dealing with short-term supply issues, they also thought Marvell's optical solutions business, which are used for high-speed data transmission in data centers, "is stronger than generally perceived, and is more durable and higher margin than their ASIC business."
In the company's last earnings report, investors were focused on Marvell's partnership with Amazon.com Inc.'s (AMZN) Amazon Web Services, for which it provides data-center chips and custom AI products, such as its Trainium chips. This topic could garner attention on Marvell's earnings call Thursday as well.
"The Trainium 3 debate may continue to be noisy, but we believe we are past the phase of inflated expectations and anticipate steady sequential ASIC revenue reaching $2 [billion] for the year," Morgan Stanley said, referring to Amazon's upcoming chip for AI training.
And while Amazon's latest earnings report showing slower revenue growth for AWS seems to have reflected that Trainium2 didn't meet expectations, the Morgan Stanley analysts said they "never viewed it a high value-add business, and ultimately don't think it's a huge variable" for next year.
Instead, Marvell can grow with Amazon "with an 'XPU attach' project, which we assume would carry higher margins," the analysts said. Marvell refers to non-processor components that are used with its custom silicon, such as coprocessors and interconnects, as XPU attach.
-Britney Nguyen
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August 28, 2025 17:11 ET (21:11 GMT)
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