Marvell’s CEO Says the Company Didn’t Lose Any Orders. Why Was Wall Street So Worried, and How Should You Play MRVL Stock Here?

Core Viewpoint - Microsoft is considering a partnership with Broadcom for a custom AI accelerator, which could negatively impact Marvell Technology's current collaboration with Microsoft on custom ASICs for Azure [1] Company Overview - Marvell Technology has a market cap of $71.6 billion and is a leading supplier of data-infrastructure semiconductor solutions, focusing on advanced system-on-a-chip architectures [3] - The company's product lineup includes Ethernet solutions, processors, and custom ASICs, along with interconnect solutions and storage controllers [3] Recent Stock Performance - Marvell's shares dropped over 15% following reports of potential loss of key orders from Microsoft and Amazon Web Services, leading to a year-to-date decline of 24% [2][5] - The stock's decline has raised concerns about Marvell's competitive position in the custom AI chip market [2] Management Response - CEO Matt Murphy has publicly denied reports of lost business with Microsoft and Amazon, asserting that Marvell's data center business remains strong [4][7] - Several Wall Street analysts have supported this view, with some calling the negative reports "without merit" and reaffirming buy ratings on Marvell stock [8][9] Financial Performance - Marvell reported third-quarter fiscal 2026 net revenue of $2.08 billion, a 36.8% year-over-year increase, with data center revenue accounting for 73% of total revenue [10] - The company guided for fourth-quarter revenue of approximately $2.2 billion and adjusted EPS of $0.79, aligning with Wall Street estimates [12] Future Outlook - CEO Murphy projected potential revenue growth to $10 billion in fiscal year 2027 and 40% year-over-year growth in fiscal year 2028 [13] - Marvell announced plans to acquire Celestial AI for at least $3.25 billion to enhance its AI capabilities [14] Analyst Sentiment - Despite concerns over potential order losses, the consensus among analysts remains bullish, with a "Strong Buy" rating for Marvell stock and an average price target of $114.70, indicating a 37% upside potential [15]