Marvell Technology, Inc. (NASDAQ:MRVL) experienced a sharp decline on Thursday, with shares falling 10.8% to $242.78 in afternoon trading. The drop was part of a broader sell-off in the semiconductor sector, as the Philadelphia SE Semiconductor Index slumped 6.7%. Other major chipmakers, including Broadcom Inc. (NASDAQ:AVGO) and NVIDIA Corp. (NASDAQ:NVDA), also retreated, with Broadcom down 2.8% and NVIDIA losing 2.1%.
The sell-off comes ahead of the U.S. Independence Day holiday, with the Nasdaq set to close on Friday, July 3. Trading volumes were lighter as investors reduced positions, particularly in high-growth tech and semiconductor names.
Valuation Compression in Focus
The decline has brought Marvell's valuation more into line with its data-center revenue. According to Google Finance and company filings, Marvell's equity value now stands at approximately 29 times its annualized first-quarter data-center revenue, down from roughly 39 times at the stock's 52-week peak of $329.88. At its current price, the implied equity value is about $212.4 billion, compared to $288.6 billion at the peak.
This compression represents a significant de-rating of the premium investors have been willing to pay for exposure to Marvell's AI connectivity and data-center business. The market value lost since Wednesday's close amounts to roughly $25.6 billion, or about 3.5 times the company's annualized first-quarter data-center revenue. Analysts note that the sell-off is specifically targeting the valuation of AI-related sales, rather than being a broad-based pullback in chip stocks.
Fresh Analyst Support
Despite the decline, Marvell received a vote of confidence from UBS. Analyst Timothy Arcuri raised his price target to $340 from $230, maintaining a Buy rating. The new target implies approximately 40% upside from Thursday's closing level. Arcuri highlighted Marvell's leading market share in Compute Express Link (CXL) technology, projecting that CXL-linked revenue could approach $1 billion in 2027 and reach $2 billion in 2028.
Marvell has not updated its guidance since its May 27 earnings report. The company continues to forecast second-quarter revenue of $2.7 billion, plus or minus 5%, and non-GAAP diluted earnings per share of $0.93, plus or minus $0.05. CEO Matt Murphy noted "exceptional AI-related bookings" and expects "revenue growth to continue accelerating each quarter."
Market Context
The broader market also struggled, with the Nasdaq Composite falling 1.5% to 25,636.99 and the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) losing 0.3%. The sell-off occurred despite a weaker-than-expected jobs report that reduced pressure on the Federal Reserve. U.S. payrolls grew by only 57,000 in June, well below the 110,000 forecast. "It just takes the pressure off the Fed," said Adam Sarhan, CEO at 50 Park Investments.
In other company news, Marvell has strengthened its custom silicon team. SDxCentral reported that Jay Kirkland, formerly head of EPYC and Instinct platform engineering at Advanced Micro Devices, Inc. (NASDAQ:AMD), has joined Marvell as senior vice president of custom silicon engineering. Kirkland commented that AI opportunities are "expanding faster than our industry's ability to deliver them."
