Marvell Technology MRVL) shares fell 10% in Friday’s trading session despite the AI chip leader posting record Q2 results yesterday evening and raising its longer-term outlook.
The sharp sell-off suggests investors wanted an even bigger beat following MRVL’s tremendous AI-fueled rally rather than signaling a meaningful deterioration in the company’s fundamentals.
With data-center demand accelerating and management raising its current fiscal 2027 and FY28 revenue forecasts, Marvell’s post-earnings dip may be starting to look more like a buying opportunity.
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Marvell Posts Record Q2 Results
Marvell delivered record quarterly revenue of $2.74 billion, rising over 36% from Q2 sales of $2 billion a year ago and topping estimates of $2.71 billion. Adjusted net income came in at $865.9 million, translating to record quarterly EPS of $0.94, which climbed 40% YoY and edged Q2 expectations of $0.93 per share.
More importantly, Marvell’s critical data-center business generated a record $2.17 billion, surging 46% from the prior-year quarter and accounting for 79% of total revenue. CEO Matt Murphy also stated that AI-related bookings remain exceptionally strong, with Marvell expecting its growth rate to accelerate during the second half of the year.
For Q3, Marvell expects revenue of approximately $3.15 billion, representing roughly 15% sequential growth and more than 50% YoY growth, along with adjusted EPS of $1.10 at the midpoint (+44% YoY growth).
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MRVL Raises Its AI-Fueled Growth Outlook
Arguably the most encouraging part of Marvell’s Q2 report was another increase to its longer-term guidance.
Management now projects FY27 revenue of roughly $12 billion, up from its previous $11.5 billion forecast and implying approximately 45% annual growth. Data-center revenue is expected to surge about 60%.
Marvell also raised its FY28 revenue target to $18 billion from $16.5 billion, with data-center sales expected to grow more than 60% as custom AI silicon and connectivity demand accelerates.
So why is MRVL falling? Expectations were extremely elevated following the stock’s massive rally this year, with shares still up +150% YTD.
Investors also appear disappointed that Marvell’s recently expanded custom-chip relationship with Alphabet’s GOOGL) Google may not provide a significant incremental revenue boost until FY29, while the growing mix of custom silicon has raised some concerns about margins.
