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Investing.com -- Shares of Marvell Technology Inc (NASDAQ:MRVL) tumbled over 12% in premarket trading on Friday after the chipmaker’s third-quarter revenue outlook fell short of lofty expectations for artificial intelligence demand, overshadowing record quarterly sales.
For its fiscal second quarter, Marvell posted adjusted earnings of $0.67 per share, matching consensus, with revenue climbing 58% year-on-year to $2.01 billion, in line with estimates.
Growth was fueled by strong AI demand for custom silicon and electro-optics products, as well as a rebound in enterprise networking and carrier infrastructure markets.
The Wilmington-headquartered company guided October-quarter revenue to $2.06 billion, shy of the roughly $2.1 billion analysts had expected, while projecting EPS of $0.74, slightly above consensus.
Investors appeared unimpressed, sending the stock lower despite management highlighting record AI design activity across more than 50 opportunities at over 10 customers.
Evercore ISI noted the outlook implies revenue growth below expectations, though EPS guidance came in modestly better, helped by operating expense discipline.
CFRA’s Angelo Zino said the miss was partly attributable to Marvell’s $2.5 billion divestiture of its automotive Ethernet business earlier this month. “We estimate MRVL would have met consensus revenue views prior to the $2.5B Automotive Ethernet divestiture to Infineon,” Zino said in a statement.
CEO Matt Murphy emphasized that Marvell’s custom AI silicon pipeline is at an “all-time high,” underscoring the long-term growth opportunity, even as near-term guidance left investors disappointed.