Marvell Hit With Downgrade, Price Target Cuts As Analysts Flag Uncertainty In Microsoft, Amazon AI Deals

Marvell Technology (MRVL) plunged more than 17% at market open on Friday after issuing weaker-than-expected third-quarter guidance in its fiscal second-quarter report released late Thursday, which drew swift price target cuts and a ratings downgrade from Wall Street.

Marvell’s stock was among the top trending tickers on Stocktwits at the time of writing. Despite the dip in its stock price, retail sentiment around the company surged to ‘extremely bullish’ from ‘bullish’ with chatter rising to ‘extremely high’ from ‘low’ levels over the past day, according to platform data.

Bank of America downgraded Marvell’s stock to ‘Neutral’ from ‘Buy’, lowering its price target to $78 from $90, as per TheFly. The firm cited uncertainty surrounding Marvell’s role in Microsoft’s (MSFT) Maia AI accelerator and its share of Amazon’s (AMZN) next-generation 3nm project.

Morgan Stanley trimmed its target on the stock to $76 from $80 while keeping an ‘Equal Weight’ rating. The firm noted that while guidance was largely in line once the sale of Marvell’s automotive Ethernet business was factored in, the data center segment “disappointed.” Morgan Stanley added that it was not surprised by the business’s “lumpiness,” but said it was unexpected that the ASIC full-year outlook continues to decline even as demand for Amazon’s Trainium processors strengthens elsewhere. UBS, which lowered its price target to $95 from $110,  also pointed to “lumpiness” in Marvell’s business. 

Needham echoed similar concerns about Marvell’s next-gen XPU contracts with Amazon and Microsoft as it lowered its price target to $80 from $85, but maintained its ‘Buy’ rating on the stock.

Marvell’s stock has fallen more than 41% this year and is down around 7% over the past 12 months.

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