Marvell logo building

Marvell Technology Data Center Revenues Surge, But the Rest Fall

Marvell logo building

Marvell Technology Inc. (NASDAQ: MRVL) is a leading semiconductor company in the computer and technology sector that designs and manufactures high-performance chips. They are a powerhouse when it comes to their largest market addressing data infrastructure solutions and data centers. While the company is a benefactor of the artificial intelligence (AI) boom and explosive growth in data centers, it may be perceived as one-dimensional, as evidenced by the 10% drop in shares in reaction to its fiscal Q1 2025 earnings report.

Marvell has heavy competition from peers, including Broadcom Inc. (NASDAQ: AVGO), Synaptics Inc. (NASDAQ: SYNA) and STMicroelectronics N.V. (NYSE: STM).

The Good: Explosive Data Center TAM Growth of Over 300% by 2028.

Marvell generates 70% of its revenues from the data center segment. The boom in AI infrastructure demand and scorching growth in data centers led to an 87% YoY and 7% sequential spike in its data center revenues to $816.4 million in its fiscal Q1 2025 earnings report. Robust growth was driven by cloud AI and cloud infrastructure electro-optic products as well as initial shipments of its custom AI compute programs.

Marvell Expects to Double its 10% Market Share in Coming Years.

Data Center revenue is expected to grow in the mid-single digits sequentially as they ramp up custom AI silicon production. The data center's total addressable market (TAM) is expected to more than triple, growing from $21 billion last year to $75 billion in 2028. With the numerous opportunities in interconnect, switching, storage, and computing, Marvell expects to double its 10% market share over the next several years.

Marvell is believed to be working on application-specific integrated circuit (ASIC) chips with hyperscaler giants Inc. (NASDAQ: AMZN) on its 5nm Tranium chip, Alphabet Inc. (NASDAQ: GOOGL) on its 5nm Axion ARM CPU and Microsoft Co. (NASDAQ: MSFT) on its Maia chip.

The Bad: Carrier and Enterprise Revenues Sink 58% YoY

Inventory glut and normalization are expected to continue driving softer industry demand. Enterprise networking revenue sank 58% YoY and 42% sequentially to $153.1 million. Carrier revenues fell 75% YoY and 58% sequentially to $71.8 million, well below Marvell's forecast for declines of 40% and 50%, respectively. However, the company expects a recovery to start in the second half of fiscal 2025 as customers work through the inventory correction.

The Ugly: Consumer Segment Revenues Fall 70% YoY

The consumer segment revenue fell 70% YoY to $42 million, in line with prior guidance. However, the company expects the consumer segment revenues to double on a sequential basis. The automotive and industrial segment saw a 13% YoY decline to $77.6 million due to broad inventory correction in the automotive end market. Growth is expected to resume after a flat fiscal Q2 2025.

Marvell stock chart


MRVL Sinks on a Descending Triangle Breakdown Pattern

The daily candlestick chart on MRVL illustrates a descending triangle breakdown pattern. The descending trendline formed at the $85.76 swing high on March 7, 2024, and the ascending lower trendline formed at the $61.72 swing low on April 22, 2024. MRVL rejected off the upper trendline at $78.44 and collapsed through the lower trendline on its earnings release as shares spilled to $66.10. The daily relative strength index (RSI) fell to the 45-band and is coiled to either bounce and retest the lower trendline or proceed on its next leg down. Pullback support levels are at $66.10, $61.72, $55.63 and $50.35.

Robust Growth Hampered by a Ball and Chain.

Marvel reported fiscal Q1 2025 EPS of 24 cents, matching consensus estimates. Revenues fell 12.2% YoY to $1.16 billion, beating $1.15 billion consensus estimates.

 Marvel Provides Conservative In-Line Fiscal Q2 2025 Guidance.

Marvell took a conservative approach due to its sinking segments and provided in-line guidance for fiscal Q2 2022 EPS of 24 cents to 34 cents versus 28 cents consensus estimates. Revenues are expected to be between $1.1875 billion and $1.3125 billion versus the consensus estimates of $1.22 billion. Non-GAAP gross margins are expected to be around 62%. Non-GAAP operating expenses are expected to be around $455 million.

Marvell Technology CEO Matt Murphy commented, "For the second quarter of fiscal 2025, we are guiding an 8% sequential increase in revenue at the mid-point, fueled by ramping custom AI silicon. We see a favorable setup for the second half of this fiscal year, driven by continued growth in data center and the beginning of a recovery in enterprise networking and carrier infrastructure."

Marvell Technology analyst ratings and price targets are at MarketBeat. 

Learn more about MRVL

Newest Stories

microsoft logo on smartphone 100 bills in backgroud
6 Reasons the S&P 500 Will Keep Rising This Year

The S&P 500 (NYSEARCA: SPY) index can keep rising this year even if many stocks within it don’t. The reasons are simple and center around the top six holdings. The S&P 500 is a market cap-weighted index, meaning those companies with the highest market cap have the most impact, and wh...

Thomas Hughes | Jun 18, 2024

Cava Group, Inc. logo is displayed on a smartphone screen
CAVA's Per-Restaurant Stock Value Outshines Chipotle's

Markets are now looking more into shares of CAVA Group Inc. (NYSE: CAVA), not because it’s small but because it’s growing. Most seeking consumer discretionary sector opportunities may try to copy one of Wall Street’s sweethearts: Bill Ackman. Through his hedge fund, Pershing Squa...

Gabriel Osorio-Mazilli | Jun 18, 2024

Upstart logo is displayed on a smartphone screen
The Most Shorted Stocks in June: Hold, Short, or Squeeze?

Short interest is high and rising in many stocks, setting them up for a squeeze given the proper catalyst. The catalyst for a squeeze could be as simple as Meme stock mania and result in quick gains for savvy investors. The question is which meme stocks are ripe for squeezing and how likely a sque...

Thomas Hughes | Jun 18, 2024

Stethoscope on a stock chart
Top 2 Small Cap Healthcare Stocks to Buy Before Rate Cuts

Will the market get interest rate cuts at all this year? That is the question that looms over most investors’ shoulders today. However, there aren’t many reasons for the Federal Reserve (the Fed) to consider cutting rates. With sticky inflation and a hotter-than-expected labor market, ...

Gabriel Osorio-Mazilli | Jun 18, 2024

TickerTalk Unveils Real-Time Financial Insights and Breaking News!