Marvell Surpasses AI Chip Sales Target, Aims Higher For 2026, But Stock Plunges Due To Muted Guidance

Marvell Technology Inc. MRVL smashed its artificial intelligence data center revenue target in fiscal 2025. The chipmaker also reiterated plans to exceed fiscal 2026’s target but issued a soft earnings and revenue guidance which was roughly in-line with analyst estimates.

What Happened: About 75% of Marvell’s total revenue in the fourth quarter was driven by AI data center-led sales. Whereas for the full fiscal year 2025, the company’s AI revenue was substantially above its $1.5 billion target.

“We also expect to very significantly exceed our $2.5 billion target in fiscal 2026,” said Matthew Murphy, the chairman, president, and CEO of the company.

While the CFO Willem Meintjes issued a revenue guidance in the range of $1.875 billion, with a plus or minus 5% possibility, it was roughly in-line with the street’s $1.87 billion expectation. Shares of the company plunged nearly 15% in after-hours trading based on the soft guidance.

“We project our overall revenue from the auto and industrial end market to decline sequentially in the high single digits on a percentage basis,” added the CEO.

The management also emphasized the “stickiness” of its custom silicon wins due to its technology leadership, manufacturing scale, and close customer relationships.

Why It Matters: The company beat its fourth quarter estimates with adjusted EPS of $0.60 and revenue of $1.81 billion. It generated $514 million in operating cash flow and a 60.1% non-GAAP gross margin.

The shares ended 2.05% higher on Wednesday but slipped 14.85% in after-hours. The exchange-traded fund tracking Nasdaq 100 index, Invesco QQQ Trust, Series 1 QQQ ended 1.30% higher on Wednesday and fell 0.32% in after-hours.

On a year-to-date basis MRVL has fallen by 20.62% but it’s up 10.78% over the last year.

Analyst Recommendations: Benzinga tracks 33 analysts with an average price target of $113.69 for the stock, reflecting a “buy” rating. Estimates range widely from $75 to $150. Recent ratings from Morgan Stanley, Keybanc, and Barclays average at $132.67, suggesting a potential 72.86% upside.