Did The Market Read Marvell Stock Right?
Marvell Technology (MRVL) stock fell 7.3% on Monday, September 14. A $10,000 holding at the prior close was worth about $9,270 when trading ended that day. That fall is hard to explain from the company alone. Less than three weeks earlier, management had raised its revenue forecast for fiscal 2028. Did the market read Marvell stock right that Monday?
Why Did Marvell Stock Fall On September 14?
Marvell stock fell amid worries that progress in artificial intelligence could slow. The Motley Fool reported that day that AI leaders had said model development should be slowed. It added that Marvell investors feared slower AI progress could hurt the company’s growth.
The S&P 500 fell only 0.5% in the same session. Other chip stocks fell too, though none as far as Marvell: Broadcom, NVIDIA and Advanced Micro Devices fell 3.4% to 4.8%.
Most Of Marvell’s Growth Comes From One Market
Marvell’s growth comes mostly from data centers. Management links that growth to AI demand. Data centers brought in 79% of total revenue in fiscal Q2 2027. On the August 27 call, management said AI demand for its products continues to rise.
Data center revenue rose 46% from a year earlier in that quarter. Management now expects data-center revenue to grow about 60% in fiscal 2027, up from about 50% before. With the first half up about 37%, the rest of the year has to grow well above 60%. So a worry about AI progress lands on the part of Marvell that is growing fastest.
You also pay much more for each dollar of Marvell’s sales than for the market’s. Price-to-sales compares a company’s market value with a year of its sales. As of September 25, Marvell shares cost 24.9 times sales, against 3.1 for the S&P 500. Marvell’s multiple is well above its year-end levels of 8.9 to 16.6 times over the past three years.
A multiple that high appears to assume data-center growth keeps going. The drop, though, came from a worry about AI in general, not from any Marvell forecast.
Has Marvell Cut Its Forecasts Since The Drop?
No cut has been reported. Marvell’s latest forecasts are still the ones management gave on its August 27 call. For fiscal 2028, Marvell expects revenue of about $18 billion, up from the $16.5 billion it forecast a quarter earlier. By September 25, the shares had also come back above their close before the drop. On the evidence so far, the market reacted to an industry-wide worry, not to a change in Marvell’s own numbers.
Management plans to give more detail on its longer-term growth at an Investor Day on October 6. A lower figure at that Investor Day would be the first sign that the AI worry has reached Marvell’s own forecasts.
How To Act On MRVL?
