Marvell (MRVL) Stock Downgraded as Concerns Grow Over Amazon Trainium Transitions

Core Viewpoint - Marvell Technology, Inc. has been downgraded from Buy to Hold by Benchmark due to concerns over losing Amazon's Trainium chip designs to competitor Alchip, which is expected to impact the company's growth projections significantly [1][2]. Group 1: Downgrade and Market Reaction - Benchmark downgraded Marvell's stock following insights from a Silicon Valley bus tour, indicating a high degree of conviction that the company has lost both Amazon's Trainium3 and 4 designs [2]. - The downgrade is expected to be controversial, especially since Marvell has claimed there would not be a revenue "air pocket" from Amazon [2]. - Following the earnings report, Marvell's shares performed well, but the firm recommends investors take short-term profits due to an overly optimistic interpretation of the company's signals regarding Amazon [4]. Group 2: Revenue Projections and Market Dynamics - The firm projects a slowdown in Marvell's growth to only 20% XPU growth in CY26, primarily due to the loss of Amazon's designs [2]. - While Marvell is expected to see increasing annual revenue from Amazon, this is believed to be driven by continued Trainium2 volumes and a Kuiper low-earth orbit engagement rather than a successful transition to Trainium3 designs [3]. - The recently announced Trainium3 is currently only an air-cooled version for customer evaluation, with the liquid-cooled variant not expected until mid-next year, which supports the expectation of continued Trainium2 volumes for Marvell's near-term forecasts [3].