Marvell Technology (MRVL) stock has slipped over 31% from its year-to-date high, mirroring the performance of other semiconductor companies. The stock was recently trading around $223, down 32% from its highest point this year.
Similarly, popular ETFs such as the Schwab Semiconductor Index Fund (SOXX) and the VanEck Semiconductor ETF (SMH) have fallen by more than 19% and 15%, respectively, from their yearly highs.
Marvell Technology is growing, but its guidance was weaker than expected
Marvell Technology is a top technology company in the semiconductor industry, where it offers products across compute, networking, storage, and ASIC industries. Its business is firing on all cylinders, with its top clients like Google, Amazon, and Microsoft continuing doing well.
The most recent results showed that its revenue rose by 37% in the second quarter to $2.73 billion. This growth was driven by record data center revenue, which soared by 46% to $2.17 billion. Its communications revenue rose by 10% to $568 million.
MRVL stock dropped after its guidance came short of expectations. It expects revenue will rise by 50% in the third quarter to $3.15 billion, with its annual revenue growing by 60% this year. The management sees its FY’27 and FY’28 revenues hitting $12 billion and $18 billion, respectively.
This revenue is expected to keep rising because of its large deals with its top clients. It recently reached a $12.2 billion deal with Google for its custom chips. A Reuters report showed that this business will generate over $120 billion through fiscal 2033. The company will make $25 billion a year from 2028. Most notably, it has similar deals with companies like Amazon and Microsoft.
Analysts are optimistic that the company will continue rising. Yahoo Finance data shows that the revenue will jump by 46% to $12 billion this year, followed by 51% to $18.2 billion. The same is happening with its profitability, with the earnings-per-share (EPS) expected to hit $4.2 and $6.72 in 2025 and 2026, respectively.
A key challenge is that its business is highly overvalued. It has a forward price-to-earnings ratio of 75, which is slightly higher than the industry average of 22. On a GAAP basis, the forward PE ratio is 124, higher than the sector median of 28. These metrics are higher than other popular companies like Microsoft, Nvidia, and Google.
MRVL stock price technical analysis
Marvell Technology stock | Source: TradingView
The daily chart shows that the MRVL stock has rebounded, moving from a low of $162.8 in July to the current $223. It has remained slightly above the 100-day Exponential Moving Average (EMA). It is also modestly above the 50% Fibonacci Retracement level.
The risk, however, is that the stock has formed a bearish flag pattern, a common continuation sign in technical analysis. It is also between the first support and the second support lines of the Andrews pitchfork.
These technicals suggest that the stock may resume the downward trend. If this happens, it will drop to the key support level of $162, its lowest level in July. This view will be confirmed if it slips below the 100-day moving average and the lower side of the pitchfork tool.
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