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Investing.com-- CFRA analysts maintained their Strong Buy rating on shares of Marvell Technology Inc (NASDAQ:MRVL), recommending the chipmaker even as its fourth-quarter earnings missed some lofty estimates, sending its shares into a tailspin.
CFRA maintained its positive rating on Marvell as the company still beat market consensus with its Q4 earnings, missing only the top end of some forecasts.
The chipmaker forecast first-quarter revenue in line with Wall Street estimates, disappointing some investors who were hoping for stronger AI-fueled growth.
Marvel’s shares slid as much as 17% in aftermarket trade, with CFRA noting some concerns over the magnitude of Marvell’s earnings beat, pressures from worsening U.S.-China trade ties, and broader concerns over AI monetization, especially amid speculation over a shift to low-cost, high-efficiency models.
Marvell develops custom chips for use in data centers- a sector that has come under increasing interest from the AI boom. Wall Street’s biggest technology firms were seen ramping up efforts to build more AI infrastructure, while the U.S. government also recently announced a $500 billion plan for more data centers in the U.S.
Marvell’s data center revenue still grew more than expected in Q4, with CFRA stating that it expected continued momentum in AI-related networking and custom chips.
Marvell had in late-2024 signed a deal with Amazon.com (NASDAQ:AMZN) to aid the e-commerce giant in building its own custom AI silicon. The company will also supply Amazon Web Services with custom AI chips for at least five years.