Marvell Technology (MRVL), a rising name in the AI semiconductor race, posted a strong first-quarter performance, with revenue surging 63% year-over-year to nearly $1.9 billion.
The company’s prized data center segment—now accounting for over three-quarters of its total sales—hit a record $1.44 billion, thanks to increasing adoption of Marvell’s custom AI chips and high-speed connectivity products.
Still, the market wasn’t impressed. Shares fell more than 6% after the results, extending a bruising decline that has left Marvell stock down over 40% year-to-date. That reaction highlights the paradox facing the Santa Clara-based chipmaker: it’s benefiting from booming AI demand, but expectations—set sky-high by juggernauts like Nvidia—are difficult to meet.
Despite beating Wall Street’s estimates on revenue and adjusted EPS, and projecting another quarter of nearly 60% annual growth, Marvell’s in-line guidance wasn’t enough to ignite a rebound. Investors appear to want more—faster growth, higher margins, and clearer dominance in a fiercely competitive AI landscape.
Amazon Uncertainty Clouds the Outlook
A key source of investor concern lies with Marvell’s relationship with one of its most important customers: Amazon (AMZN). While the company confirmed ongoing engagement with Amazon Web Services (AWS) on future versions of the Trainium AI chips, it also acknowledged the possibility of a dual-sourcing strategy—meaning Marvell could lose some of that business.
That’s a red flag for some on Wall Street. Amazon is one of a few hyperscalers designing their own AI chips to reduce dependency on Nvidia (NVDA), and Marvell has been a major partner in enabling those efforts. If that relationship weakens, it could stall the growth in Marvell’s most lucrative segment.
Still, some analysts are willing to look past the Amazon noise. Needham’s N. Quinn Bolton reiterated a Buy rating—though he trimmed his price target to $85—arguing that Marvell remains a key player in next-gen AI architectures. Bank of America’s Vivek Arya echoed that sentiment, highlighting the company’s June 17 AI investor event as a potential inflection point.
Microsoft, Momentum, and the Road to 2026
Even if Amazon is a question mark, Microsoft (MSFT) could become the next big answer. Analysts believe the unnamed “large U.S. hyperscaler” Marvell is working with on custom AI chips is, in fact, Microsoft. Benchmark’s Cody Acree points to progress on the MAIA XPU accelerator as a major win, with production expected to begin in 2026.
That timeline reflects a broader reality: while Marvell’s AI potential is real, much of it won’t be realized until later this decade. The company has already secured cutting-edge 3-nanometer chip capacity for custom XPUs and expects related revenue to ramp up meaningfully in fiscal 2026 and beyond.
Meanwhile, the broader business remains healthy. Enterprise networking and carrier infrastructure sales are recovering, up 16% and 93% year-over-year, respectively. Cash flow from operations came in at $333 million, and Marvell also announced the $2.5 billion sale of its automotive Ethernet unit to Infineon, providing flexibility to invest in higher-growth areas.
Marvell’s valuation has also cooled. Its forward price-to-earnings ratio now sits around 21—half of what it was earlier this year, and well below its three-year average. That’s prompting some analysts to argue the stock is simply too cheap to ignore.
The June AI webinar may help change the narrative. But for now, Marvell remains a company in transition—caught between the promise of custom AI dominance and the pressure to deliver results in Nvidia’s shadow.
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