"What caused the decline was a downgrade from Benchmark analyst Cody Acree, who shifted his rating on Marvell stock from buy to hold, citing his "high conviction" that the chip designer had lost Amazon's ( NASDAQ:AMZN ) next-generation Trainium chip business. He said sources indicated Marvell lost the designs for the Trainium 3 and 4 AI chips to Taiwan-based rival Alchip Technologies, which would be a significant blow to Marvell."
"This came on the heels of a Friday report from The Information , which said Microsoft ( NASDAQ:MSFT ) is exploring Broadcom ( NASDAQ:AVGO ) as a potential chip design partner. The market has pinned much of Marvell's growth hopes on its role in Microsoft's Maia-2 AI accelerator. With hyperscalers driving explosive demand for custom silicon, these whispers of customer defections have sparked fears that Marvell's AI momentum could stall just as it was accelerating."
"but the stakes are substantial: Data center revenue - fueled by powerhouse customers like Amazon, Microsoft, Google, and Meta Platforms ( NASDAQ:META ) - accounts for roughly 73% of Marvell's total sales. This segment has been the engine of Marvell's revival, surging over 80% year-over-year in its latest quarter amid the AI boom. Losing even one major account could slash growth projections by double digits, forcing reliance on smaller wins or enterprise storage, which lag in margins and scale."
Marvell's stock dropped after Benchmark downgraded the shares, citing high conviction that Marvell lost Amazon's next-generation Trainium 3 and 4 chip designs to Alchip Technologies. Microsoft is reportedly exploring Broadcom as a potential design partner, while market expectations relied heavily on Marvell's role in Microsoft's Maia-2 AI accelerator. Data center revenue—driven by customers including Amazon, Microsoft, Google, and Meta—represents roughly 73% of Marvell's sales and surged over 80% year-over-year in the latest quarter. Loss of a single hyperscaler account could cut growth projections by double digits; losing multiple accounts could cause a severe revenue cliff.
Read at 24/7 Wall St.
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