MW Marvell's stock falls in the wake of these two competitive concerns
By Britney Nguyen
There are new fears on Wall Street related to the future of Marvell's work with Amazon and its potential to capitalize on opportunity with Microsoft
Marvell's stock was down more than 6% on Monday afternoon.
Marvell Technology's competitive positioning has been a big subject of Wall Street debate this year, and now investors seem to be feeling more pessimistic.
Shares of Marvell $(MRVL)$ were off more than 6% toward the end of Monday's session, reflecting concerns about the company's work with both Amazon.com (AMZN) and Microsoft $(MSFT)$.
Benchmark analyst Cody Acree moved from a buy to a hold rating on Marvell's stock in a note on Monday, citing "a high degree of conviction that the company has lost both Amazon's Trainium 3 and 4 designs" to Taiwan's Alchip (TW:3661). The downgrade follows his conversations with industry insiders in Silicon Valley.
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Marvell's stock reacted "exceptionally well" to the latest earnings report last week, Acree said, but he recommends that investors "take near-term profits" related to the market's "overly optimistic misread of the company's recent signals toward Amazon stability." He thinks the company's own projections imply the expectation of lost Amazon chip business.
With Alchip, Amazon is working on "more economical design, foundry and backend support" for its upcoming chip programs, according to Acree.
He acknowledged his downgrade "is a controversial call," especially after Marvell said during its earnings report last week that it doesn't anticipate an "air pocket" in revenue from Amazon next year. Amazon is Marvell's top customer for XPUs, or custom chips, Acree noted. And Marvell has said it has visibility into orders that will drive annual revenue.
Previously: Why Marvell's stock was soaring toward its best day in months after earnings
"While we believe the company is being forthright in its guidance for increasing annual Amazon revenue, we believe this commitment is driven by expected continued Trainium 2 volumes and a Kuiper low-Earth orbit engagement and not the successful transition to Trainium 3 designs that many on the sell-side have concluded," Acree said.
Next year's volumes of Trainium 2 will likely support Marvell's near-term forecasts, Acree said, as customers are currently evaluating the air-cooled version of Trainium 3, and the liquid-cooled version of the chips are not expected until at least the middle of 2026.
Additionally, Acree concluded from industry meetings that Amazon is licensing SerDes, or serializer/deserializer technology, for both Trainium 3 and 4 from Synopsys $(SNPS)$, which would further cut into its business with Marvell.
However, Marvell is anticipating a reacceleration of its XPU business in fiscal year 2028 from a new engagement with an emerging hyperscaler, Acree said, and that program will ramp up in the following years.
Marvell CEO Matt Murphy said on the company's earnings call last week that the company's fiscal 2028 data-center revenue growth could "accelerate meaningfully" from the preceding year.
Read: As Marvell's stock rises on an upbeat forecast, analysts still have these questions
TD Cowen analyst Joshua Buchalter said Marvell's projections for fiscal 2028, as well as the company's acquisition of Celestial AI, "gives bulls plenty to point to," in a note last week. He and other analysts think Marvell's new engagement will be with Microsoft for its Maia AI accelerator.
However, The Information reported on Friday that Microsoft is looking at Broadcom $(AVGO)$ as a possible chip design partner, which also dealt a blow to Marvell's stock on Monday.
Marvell did not immediately respond to a request for comment from MarketWatch regarding its business with Amazon and Microsoft.
Despite an upbeat outlook, Buchalter said Marvell still has "a lot to prove" in the second half of next year when some of its chip programs ramp up.
-Britney Nguyen
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December 08, 2025 15:52 ET (20:52 GMT)
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