Well, that certainly wasn’t the response Marvell Technology (NASDAQ:MRVL) was hoping for when the chip maker unveiled its Q2 2025 earnings report late last week. Though both top- and bottom-line figures were pretty consistent with market expectations, the company’s share price took a nosedive, losing close to 20%.
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The sell-off wasn’t really about the quarter that just passed. Revenues showed robust year-over-year growth of 58%, but investors quickly shifted their focus to what lies ahead – and that’s where doubts began to surface. In particular, Wall Street felt Marvell’s outlook for AI-driven growth fell short of the high bar now set for leading semiconductor players.
Count top Bank of America analyst Vivek Arya among those who were none too satisfied with the company’s upcoming prospects.
“Unlike prior calls, we did not hear the same level of confidence/visibility about MRVL’s AI growth prospects in the near/medium term,” explains the 5-star analyst, who is among the top 1% of Wall Street pros.
While Marvell’s data center growth of 3% in Q2 slightly missed, Arya points out that guidance for the coming quarter looks flat sequentially, compared with expectations of 5%. He’s also cautious on the supposed Q4 recovery, noting that management declined to quantify the scale of the anticipated rebound.
And that’s the sticking point for Arya, who draws attention to the company’s inability to define its upcoming successes.
“Unlike the FQ1 earnings call where management explicitly stressed existing and new custom wins, the affirmation was missing in the Q2 call,” the analyst adds.
Much of the uncertainty revolves around the timing of new projects, including Microsoft’s Maia and Amazon’s 3nm initiative. Arya now models revenue contributions from Microsoft’s program starting a year later than expected – in 2027 instead of 2026 – cutting his 2026 data center growth forecast from the mid-20% range to the mid-teens. As a result, Arya is tapping the brakes on his bullish stance.
“In our view, a Neutral rating better reflects/balances MRVL’s opportunity/ breadth of IP with lumpiness in AI sales, customer centration risks, and strong competition for custom chip (ASIC) sockets,” Arya sums up. Yet, his $78 price target still implies a 24% upside from current levels. (To watch Vivek Arya’s track record, click here)
Most analysts, however, aren’t ready to turn cautious. With 26 Buys, 7 Holds, and no Sells, MRVL boasts a Strong Buy consensus. The Street’s average price target of $88.52 suggests a ~41% upside potential. (See MRVL stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.