Marvell Technology shares fall despite record revenue and raised guidance

Marvell Technology shares fell between 8% and 10% following its fiscal second-quarter 2027 earnings report, despite the company beating analyst expectations on both revenue and earnings per share. The company reported record quarterly revenue of approximately $2.74 billion, a 37% increase year-over-year, driven largely by a 46% surge in data center revenue.

Management raised its long-term revenue guidance, forecasting approximately $12 billion for fiscal 2027 and $18 billion for fiscal 2028. However, investors reacted negatively to concerns regarding gross margins and the timing of revenue from custom AI chip contracts, specifically a major partnership with Google. While the Google deal could potentially generate up to $120 billion in cumulative revenue through 2033, analysts noted that the most significant financial contributions are expected to materialize in later years, specifically around fiscal 2029.

Despite the immediate stock decline, many Wall Street analysts maintained bullish outlooks, citing the robust demand for AI infrastructure and the company's strategic position in the custom silicon market. Analysts from firms including Bank of America, Stifel, and KeyBanc reiterated ‘Buy’ ratings with price targets significantly higher than current trading levels.