Marvell Technology (NASDAQ:MRVL) saw its shares slide more than 5% in premarket trading after the company’s earnings and revenue guidance for the fiscal Q1 2025 missed analyst expectations.
For Q4 2024, the semiconductor maker reported earnings per share (EPS) of $0.46, aligning with consensus estimates. Revenue came in at $1.43 billion, also above the estimated $1.42 billion.
Of that, revenue from its data center segment, which encompasses custom AI chips and networking equipment, was reported at $765.3 million, up 54% year-over-year and exceeding forecasts of $759.8 million.
Looking ahead, Marvell Technology anticipates first-quarter 2025 earnings to be between $0.18 and $0.28 per share, below the analyst consensus of $0.40.
Q1 revenue is anticipated to be around $1.15 billion, also below the consensus projection of $1.37 billion.
Moreover, Marvell has also declared a $3 billion stock buyback program.
In the wake of the report’s release, Summit Insights Group analysts upgraded MRVL stock to Buy.
“We think MRVL's Carrier, Enterprise Networking, and Consumer sales will bottom in the April quarter,” analysts said.
While the sustainability of the company’s AI-related sales growth raises some concerns, analysts feel “encouraged about its expanding SAM in the AI-related market segment,” they wrote.
“We think it's time to get constructive on MRVL regarding the growth potential in the AI custom silicon programs as the downside in the carrier, enterprise, and consumer end-markets has been de-risked.”
Meanwhile, JPMorgan analysts led by Harlan Sur upped their price target on MRVL from $70 to $90, saying the company’s team “should be able to drive sequential growth” following the April quarter, which represents the cyclical trough.
This growth is expected to be fueled by the “continued strength of its cloud/AI programs and as excess customer inventory digestion headwinds in its cyclical businesses begin to ease,” Sur wrote.