Marvell (MRVL) could produce exceptional returns because of its solid growth attributes.
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When a company reports its latest earnings numbers, the news can have a significant impact on its stock price. When a stock has fallen significantly, it could create an attractive buying opportunity for investors.
A stock market selloff was due after the post-Trump election euphoria sent artificial intelligence stocks and other growth areas skyrocketing. Those massive runs followed countless triple-digit rebounds off the stock market's 2022 lows.
Chipmaker Marvell Technology's (MRVL 4.00%) year went from bad to worse after the company released its fiscal 2025 fourth-quarter results (for the quarter ended Feb. 1) on March 5, which was surprising as the company reported remarkably solid growth in its revenue and earnings and also issued terrific guidance for the current quarter.
Marvell Technology's stock fell 30% despite beating revenue and EPS estimates due to high buy-side expectations and weak sentiment from broad-based market. Data Center revenue grew 78.5% YoY in 4Q FY2025, with AI contributing over 50%, and I project to grow 77.3% YoY in 1Q FY2026. The AI revenue mix has been increasing, driven by strong demand for its custom XPUs, contributing to robust growth momentum.
Falling 48% from its highs of $127 a share in January, Marvell Technology (MRVL) is an AI chip stock that investors are hoping will rebound.
One of the AI darlings of the stock market in 2024, Marvell Technology NASDAQ: MRVL, has fallen on its face in 2025. After rising 83% in 2024, the stock is down 40% this year through Mar. 10.
Shares of Marvell Technologies (MRVL -7.30%) were plunging following its fiscal 2025 fourth-quarter earnings report, despite the company seeing strong data center and artificial intelligence (AI) revenue growth. The stock is now down more than 40% year to date.
Marvell Technology's growth is driven by strong demand for AI chips, custom ASICs, and electro-optics products, with new hyperscaler developments driving future growth. The Company has an opportunity to cross-sell across its hyperscaler XPU customers for networking equipment and server interconnects. Though the inventory build in Q4'25 raised some concerns across analysts, I believe this was the result of new product development and higher volume production rather than customer inventory digestion.
The technicals are highly bearish, but that's what you would expect after the recent plunge in Marvell stock. Despite a very negative reaction, I find Q4 results to be robust and Q1 guidance to be encouraging, as revenue and EPS growth is expected to accelerate. The P/S ratio shows that Marvell is currently undervalued relative to historic growth as the recent contraction provides opportunity.
Marvell's correction has occurred overly fast/furious, perhaps attributed to the slower demand recovery in most of its end markets and deteriorating adj. gross margins. This is on top of the fact that 43% of its FQ3'24 revenues are based in China (in line YoY), triggering potential growth headwinds depending on the US export controls. Even so, MRVL's high-double digits growth observed in its data center segment and the growing hyperscaler partnerships through 2026 cannot be ignored.