The company’s relationship with Amazon, which has been a hot subject on Wall Street as Marvell’s stock has underperformed this year, will be of interest to investors.
Although Marvell Technology Inc.’s fiscal first-quarter earnings were as expected, some Wall Street analysts are still unsure about Marvell’s relationship with Amazon.com, so the company’s upcoming commentary may be more significant than the most recent figures.
The computer chip company’s April quarter revenue of $1.9 billion was in line with the FactSet analyst average and up 63% from the same period last year. The $1.4 billion in data-center income was likewise consistent with projections. A penny more than the 61 cents analysts were aiming for, Marvell (MRVL) posted adjusted earnings of 62 cents per share.
The company “delivered record revenue in the first quarter” and is “forecasting continued strong growth into the second quarter,” according to a statement released by Marvell CEO Matt Murphy.
As anticipated by analysts, Marvell set its July quarter guidance at $2 billion.
“This momentum is being fueled by strong AI demand in the data-center end market, where our revenue is benefiting from the rapid scaling of our custom silicon programs and robust shipments of our electro-optics products,” Murphy said. Marvell is in a unique position to be at the forefront of this change as the industry continues to shift toward creating specialized AI infrastructure. We anticipate robust growth in the second quarter and beyond from our bespoke silicon business.
Marvell’s stock is down over 40% this year and dropped over 3% in Thursday’s after-hours trade.
In a note released on Tuesday ahead of the company’s earnings report, Morgan Stanley analysts stated that they had reduced their expectations following Marvell’s mid-quarter guidance range reduction to $1.85 billion, plus or minus 2%, from a previous range of plus or minus 5%.
“The announcement was somewhat disappointing given the ongoing positivity from the Trainium supply chain, strength in optical, and an anticipated rebound in traditional networking/storage/comm infrastructure,” according to analysts.
Marvell and Amazon Web Services have partnered to supply the cloud giant with specialized AI solutions, including its Trainium processors, and data-center chips. During the earnings call, investors will want to learn more about that relationship.
When it comes to application-specific integrated circuits, Morgan Stanley’s inspections “indicate solid Trainium2 builds and optical strength,” and the company’s revenue “should be fine near term.”
The analysts are more worried that “this is clearly not a high-quality business if we are still debating about a chip coming out later this year,” even though they anticipate that Marvell’s ASIC revenue will increase as a result of working with Amazon (AMZN) on its Trainium processors.
Analysts at Melius Research stated earlier this month that Marvell’s affiliation with Amazon’s Trainium 3 and Trainium 4 accelerators was obscuring the company’s potential for growth in 2026 and 2028.
“The noise/controversy around potential content losses to Taiwan’s Alchip is showing no sign of abating after my recent visit to Taiwan,” an analyst with Melius wrote. “If there is no upside – and even downside – then investors need to be hoping for perfect execution and an enduring role in an unproven Microsoft accelerator line.”
