Marvell Technology (MRVL) CEO Matt Murphy addressed rumors that the company lost business to tech giants Amazon (AMZN) and Microsoft (MSFT). In a CNBC interview with Jim Cramer, Murphy stated “I can tell you this, from Tuesday to Friday, nothing changed… We didn’t lose any business.”
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Despite Marvell’s robust Q3 beat and planned acquisition of Celestial AI, MRVL stock fell 7% on December 8 after Benchmark analyst Cody Acree downgraded the stock to Hold from Buy. Acree claimed that Marvell ai-deal-with-high-degree-of-conviction">lost a critical piece of business with Amazon Web Services’ next-generation AI processors, Trainium 3 and 4, to its Taiwanese rival, Alchip.
At the same time, reports that Microsoft is considering shifting its custom chip business to rival Broadcom (AVGO), put further pressure on the stock. Microsoft is reportedly discussing co-designing future AI chips, Maia, with Broadcom, potentially risking a significant portion of Marvell’s future revenue.
CEO Dismisses Loss Claims
Murphy emphasized that Marvell still maintains strong, key partnerships with all major U.S. hyperscalers. He affirmed that the company’s position in the data center market remains very stable, echoing the optimistic outlook presented for the quarter.
He added that there is currently a huge opportunity to invest in Marvell, highlighting that MRVL stock trades at a relatively cheaper multiple compared to the semiconductor index, and is “not an average company.”
Although Marvell raised its full year Data Center revenue growth guidance to exceed 40%, Murphy mentioned during the earnings call that the XPU (custom accelerators) business is expected to grow only about 20% in a conservative scenario. This fueled analysts’ concerns that Marvell’s dependence on a few large XPU customers could jeopardize growth if any decide to leave.
Is Marvell Stock a Good Buy?
Analysts remain divided about Marvell’s long-term outlook. On TipRanks, MRVL stock has a Moderate Buy consensus rating based on 21 Buys and eight Hold ratings. The average Marvell Technology price target of $120.32 implies 35.3% upside potential from current levels. Year-to-date, MRVL shares have lost 19.3%.
