Core Viewpoint - Marvell Technology's disappointing earnings guidance led to a significant drop in its stock price, highlighting investor dissatisfaction with merely meeting expectations in a high-demand AI market [1] Financial Performance - Marvell reported Q2 revenue of $2.01 billion, a 58% year-over-year increase, which met analyst expectations [1] - Data center revenue grew 69% year-over-year to $1.49 billion, slightly below the analyst average expectation of $1.51 billion [1] - Adjusted earnings per share were $0.67, also in line with analyst expectations [1] Earnings Guidance - The company provided a Q3 revenue guidance midpoint of $2.06 billion, falling short of the analyst average expectation of $2.11 billion [1] - CEO Matthew Murphy indicated that Q3 data center revenue would remain flat sequentially but is expected to strengthen significantly in Q4 [1] Market Expectations - Despite strong demand for custom AI chips and optical products, the market had higher expectations for Marvell's performance [1] - Analyst Kinngai Chan noted that the weak guidance for Q3 suggests a decline in custom ASIC business, which was unexpected given the anticipated acceleration in growth due to design orders from large clients [2] Client Impact - Delays in Microsoft's self-developed AI chips until 2028 or later could negatively impact Marvell, as it was set to design components for these chips [2] - Amazon's AWS is reportedly losing market share to competitors like Microsoft Azure and Alphabet's Google Cloud, which may also affect Marvell's business [2] Future Outlook - Analyst Tore Svanberg believes Marvell remains well-positioned in the ASIC sector but may require 12-18 months for the business to diversify and achieve sustained outperformance and upward guidance revisions [2]

Core Viewpoint - The company reported record revenue of $2.01 billion for Q2, a 58% year-over-year increase, but only met expectations, leading to a significant drop in stock price after the announcement [1][3] - The Q3 revenue guidance of $2.06 billion was slightly below analyst expectations of $2.11 billion, disappointing investors [3][4] Financial Performance - Q2 revenue reached $2.01 billion, a 58% increase year-over-year, but aligned with Wall Street expectations [3] - Adjusted EPS was $0.67, also in line with analyst forecasts [3] - The company’s Q3 revenue guidance is $2.06 billion, which is lower than the expected $2.11 billion [3][4] Strategic Focus - The company has divested its automotive Ethernet business to focus more on AI opportunities and data center investments [4] - The data center segment currently contributes 75% of total revenue [4] Business Outlook - The growth of the custom chip business is expected to be "non-linear," with a potential strong performance in Q4 after a flat Q3 [5] - The company has updated its design achievements, with 18 multi-generation XPU and export add-on slots, and over 50 new potential opportunities, estimated to generate $75 billion in potential revenue over their lifecycle [5][6] Market Reaction - The market's negative reaction is attributed to the high expectations built around AI stocks, leading to a narrow margin for error [7][8] - Analysts believe the company remains an attractive player in the AI boom due to its ASIC chips for large-scale data centers and opportunities in network and cloud infrastructure [8] Competitive Position - Analysts from Morgan Stanley noted potential short-term supply issues but highlighted the strength and durability of the company's optical solutions for high-speed data transmission compared to its ASIC business [9] - The collaboration with Amazon AWS regarding the next-generation AI training chip, Trainium 3, is expected to continue, with the belief that the company can grow alongside Amazon through higher-margin "XPU attach" projects [9]

Core Viewpoint - The recent earnings report from Marvell Technology did not exceed Wall Street's high expectations, leading to a significant drop in its stock price after hours trading, despite reporting record revenue and strong year-over-year growth [1][3]. Financial Performance - Marvell Technology reported Q2 revenue of $2.01 billion, a 58% year-over-year increase, but only met Wall Street expectations [1]. - The adjusted earnings per share were $0.67, also in line with analyst forecasts [1]. - The guidance for Q3 revenue was set at approximately $2.06 billion, slightly below the analyst expectation of $2.11 billion [1]. Strategic Focus - The CEO, Matt Murphy, indicated that the company is focusing on AI opportunities by reallocating investments from other markets to data centers, which currently contribute 75% of total revenue [3]. - Marvell completed the divestiture of its automotive Ethernet business to enhance flexibility in stock buybacks and capital allocation [3]. - The company plans to report non-data center end markets as a single segment starting in Q3 [3]. Market Expectations and Analyst Insights - Analysts noted that the market's reaction was driven by previously high expectations for AI stocks, which left little room for error [4]. - Despite short-term supply challenges, analysts believe Marvell's optical solutions for data centers are stronger and more sustainable than previously thought [4]. - The collaboration with Amazon AWS regarding the next-generation AI training chip, Trainium 3, is expected to continue, with analysts anticipating steady growth in Marvell's ASIC business [4].