Marvell’s stock sinks despite earnings beat and strong guidance
Chipmaker Marvell Technology Inc. beat expectations and posted guidance that came in just above Wall Street’s estimates, but it wasn’t enough to impress investors, and its stock was headed south in after-hours trading.
The company, which designs custom artificial intelligence processors as well as standard chips and optical networking technology, has emerged as a major beneficiary of the AI boom this year. But with rising fears that the AI market could be entering bubble territory, it’s likely that investors were looking for a much bigger earnings beat.
Instead, Marvell only just edged past the market’s expectations. It delivered adjusted second-quarter earnings of 94 cents per share, barely ahead of the Street’s target of 93 cents. Revenue for the period rose 37% from a year earlier to $2.74 billion, ahead of the $2.72 billion target. All told, the company’s net income rose to $308 million, up from $194.8 million in the same period last year.
Marvell’s guidance for the current period was a bit better. The chipmaker said it’s looking for third-quarter earnings of $1.05 to $1.15 per share on revenue of around $3.15 billion at the midpoint of its range. Wall Street is looking for earnings of $1.08 per share on sales of $3.04 billion. Marvell’s stock fell more than 7% after-hours as investors digested the company’s latest results. However, the stock is still up 184% in the year to date, and 222% over the last 12 months.
