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.
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