Marvell Q2 FY2027 earnings: record revenue, raised guidance

Marvell Technology reported record Q2 2027 revenue of $2.739B, up 37% YoY, and raised revenue outlooks for FY2027 and FY2028. However, shares fell 8% after-hours due to gross margin guidance of 57.5-58.5%, down from 58.9% in Q2. Management attributed the margin decline to growth in lower-margin custom chip business.

Wall Street indexes fell on Friday after Fed Chair Kevin Warsh reaffirmed the Fed's commitment to fighting inflation, increasing prospects for a September rate hike. Traders are split on a rate hike or hold. Nvidia slipped 4.6%, Marvell tumbled 10.3%, while Alphabet and Apple rose. The S&P 500 lost 0.25%, Nasdaq dropped 0.52%, and Dow fell 0.02%.

Bond yields rose as investors anticipated a Fed rate hike, with the 2-year Treasury yield jumping to 4.35%. Stocks dipped slightly, with the S&P 500 down 0.2%. Gap surged 12.9% on earnings, while Marvell fell 10.3% despite beating estimates. Investors priced in a more credible Fed, according to analysts.

Marvell Technology's shares dropped 8% to $221.6 despite strong AI-driven results. Investors questioned long-term growth, overshadowing higher revenue forecasts and a Google chip deal potentially worth $120bn. CEO Matt Murphy expects significant Google revenue contributions from 2029. Analysts raised price targets, with a median of $275, implying 13.8% upside.

US stocks dipped slightly after Fed Chair Kevin Warsh's speech, which reinforced expectations of rate hikes to control inflation. The Dow, S&P 500, and Nasdaq ended the week with modest gains. Gap rose 12.9% on stronger-than-expected profits, while Marvell Technology fell 10.3% despite beating estimates, as gains were already priced in.

Marvell Technology (MRVL) shares fell 8% despite reporting record Q2 results with $2.739B revenue, up 37% YoY. The company raised fiscal 2027 and 2028 growth targets, citing AI-driven data center revenue growth. Analysts noted the stock's premium valuation and reliance on future Google deal revenue. MRVL trades at 59.52x forward earnings, with institutional ownership rising and short interest low. The stock's decline reflects investor impatience for immediate growth from the Google partnership,