Marvell Technology Inc.’s shares plummeted over 7% on Friday despite the company reporting fiscal first-quarter results in line with expectations. Investors remain concerned about the semiconductor company’s next-generation custom chips for tech giants Amazon and Microsoft.
During the earnings call on Thursday, CEO Matthew Murphy attempted to alleviate some of these concerns by stating that Marvell’s custom chips business is “benefitting from revenue contributions across multiple programs.” However, this reassurance failed to convince investors, leading to a significant stock slump.
The market’s skepticism highlights the ongoing uncertainty surrounding Marvell’s business dealings with major cloud computing providers. As the demand for custom chips continues to rise, driven by the growing need for artificial intelligence and machine learning capabilities, investors are closely watching Marvell’s progress in this area.
Marvell Technology’s situation reflects the broader challenges faced by semiconductor companies in meeting the demands of major tech players while navigating the complexities of the rapidly evolving chip market.
