Marvell plunges 18% as outlook falls short of high expectations

Core Viewpoint - Marvell Technology's shares dropped over 17% due to guidance that did not meet elevated buyside expectations, despite reporting slightly better-than-expected earnings and revenue for the fourth quarter [1][4]. Group 1: Financial Performance - For the first fiscal quarter, Marvell expects sales of approximately $1.88 billion, slightly above the $1.87 billion forecasted by analysts, but below some buyside expectations of around $2 billion [1]. - In the fourth quarter, Marvell reported adjusted earnings per share of 60 cents and revenue of $1.82 billion, which exceeded the earnings estimate of 59 cents and revenue prediction of $1.80 billion [4]. - Revenue from data centers was reported at $1.37 billion, surpassing the average estimate of $1.36 billion [4]. Group 2: Market Reactions and Expectations - The disappointing guidance has raised concerns regarding Marvell's partnership with Amazon Web Services on the Trainium AI chip and the potential limitations in the custom application-specific integrated circuits business [2]. - Analyst Tom O'Malley from Barclays noted that while Marvell's future ASIC prospects sound promising, the near-term numbers related to Amazon are lower than expected, which is a significant concern for the market [3]. - The chipmaker has benefited from the AI boom, but the sector is now facing heightened expectations for financial performance [3].