Marvell Technology Shares Face Pressure Amid Conflicting Signals

Despite posting record quarterly results, Marvell Technology finds its equity under significant selling pressure. The catalyst was market speculation concerning potential lost business with key cloud customers, which triggered a sharp decline in the stock price. As some analysts express caution, Chief Executive Officer Matt Murphy has publicly countered the narrative, presenting a starkly different view of the company's position.

The company's fundamental performance appears robust. For its third fiscal quarter, Marvell reported record revenue of $2.075 billion, representing a 37% year-over-year increase. The data center segment is a particular powerhouse, now contributing 73% of total revenue. This operational strength, however, has been overshadowed by recent market rumors.

Concerns crystallized following a December 8 downgrade by Benchmark analyst Cody Acree, who shifted his rating to "Hold." Acree cited a belief that Marvell had lost a contract for custom chips (XPUs) destined for Amazon's upcoming Trainium series to Asian competitor AIchip. This assessment injected immediate uncertainty, erasing earlier stock gains that followed the earnings report.

CEO Issues Firm Denial on Customer Relationships

The corporate response was swift. In a televised interview, CEO Matt Murphy directly addressed the speculation. His message was unequivocal: "We have not lost any business." Murphy emphasized that relationships with all major U.S. hyperscale customers remain strong and described the data center business as being on "solid ground."

Should investors sell immediately? Or is it worth buying Marvell Technology?

This firm denial from leadership highlights the current disconnect between the company's reported fundamentals and prevailing market sentiment.

Wall Street Analysts Remain Divided

The conflicting signals are reflected in a lack of consensus among financial analysts covering the stock:
* Benchmark: Withdrew its price target concurrent with the rating downgrade.
* JP Morgan: Raised its target price from $120 to $130 per share.
* KeyCorp & Needham: Also significantly increased their price targets, maintaining an optimistic outlook.

Strategic Moves Point to Long-Term Vision

Beyond the short-term stock volatility, Marvell continues to execute its long-term strategy. The company announced the acquisition of Celestial AI for at least $3.25 billion, a move that secures access to photonic technology considered crucial for next-generation AI data center connectivity. In a complementary initiative, Marvell launched its "Golden Cable" project to capitalize on the active electrical cable market, which analysts forecast will double in volume by 2029.

Currently, the market is pricing in considerable risk, with shares down approximately 11% over the past week and nearly 39% below their 52-week high. Despite management's ambitious forecast of 25% growth in the data center segment by fiscal year 2027, uncertainty regarding customer relationships weighs on the stock. The future trajectory will likely hinge on whether the denied rumors of lost orders prove to be mere speculation or if they materialize in coming financial quarters.