Marvell Technology stock drops after Q3 earnings beat and Q4 guidance met

Marvell Technology experienced a decline in after-hours trading following the release of its third-quarter results, which slightly surpassed expectations, along with a fourth-quarter outlook that aligned with analysts’ projections. The company reported net revenue of $2.075 billion, slightly exceeding the estimated $2.06 billion, and adjusted earnings per share of $0.76, compared to the anticipated $0.74.

Looking ahead to the fourth quarter, Marvell anticipates net revenues of $2.2 billion (+/- 5%) and adjusted EPS of $0.79 (+/- $0.05). This forecast closely mirrors Wall Street’s expectations of $2.19 billion in revenue and an EPS of $0.79.

In addition to its financial results, Marvell revealed its intention to acquire Celestial AI, a company specializing in data transmission between chips using light technology. The acquisition is valued at a minimum of $3.25 billion in cash and stock, with potential additional payments of up to $2.25 billion contingent on Celestial AI’s cumulative revenues reaching at least $2 billion by the conclusion of Marvell’s fiscal 2029.

The recent surge in Marvell’s stock price can be attributed, in part, to growing investor excitement surrounding custom chips, which was further boosted by the debut of Google’s Gemini 3. Marvell’s collaboration with Amazon as a co-designing partner for custom chips, particularly in providing connectivity infrastructure for the Trainium 3 model launched recently, has also attracted positive attention.

Despite these recent developments, Marvell has struggled as one of the underperforming chip stocks this year, with a decline of approximately 15% year-to-date leading up to these results.