Marvell Technology’s (MRVL.O) shares plunged by 19.8% on Thursday, marking their worst day in over two decades. The sharp decline follows a revenue forecast for the upcoming quarter that failed to meet investor expectations, reigniting concerns about cooling demand for AI infrastructure.
The stock closed at $72.28, reaching a four-month low of $71.65 earlier in the day. Investors had been looking to Marvell’s earnings, a key supplier of custom AI chips, for indications of sustained demand in the AI sector, which has driven significant market growth since the rise of ChatGPT in late 2022. However, Marvell’s forecast for the next quarter was only slightly above analyst expectations, falling short of the more substantial beat that investors were hoping for.
TD Cowen analyst Joshua Buchalter noted that investors were anticipating stronger revenue growth, given recent comments on capital expenditures from some of Marvell’s largest customers. With over 45 million shares traded, significantly more than the 50-day average of 14 million, the market responded nervously.
The decline in Marvell’s stock price also weighed on other chipmakers, including Broadcom, which saw its shares drop nearly 7%, and Nvidia, which slid by 5%. Marvell’s performance led to a $15 billion loss in market value, and its shares are down 18% this year after an 83% rise in 2024.
Marvell’s CEO, Matt Murphy, did highlight that the company had exceeded its fiscal 2025 AI revenue target and is optimistic about surpassing its projections for fiscal 2026. However, analysts attributed the weak forecast to a slowdown in demand for on-premise data center products, as Big Tech shifts spending towards AI chips, leaving Marvell’s core networking business, which focuses on ethernet cables and fiber channels, in a weaker position.
The semiconductor sector overall has faced pressure from tariffs imposed by the U.S. government, adding to investor concerns. Analysts from Melius Research noted that sentiment around AI semiconductor stocks is currently negative, and many brokerages have cut their price targets for Marvell following the results.