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Updated at 9:31 AM EST
Marvell Technology shares fell sharply lower in early Thursday trading following a solid, but unsurprising, set of fourth quarter earnings that arrived during a broader market slump tied to tariff and economic growth concerns.
Marvell has emerged, along with Broadcom (AVGO) and Advanced Micro Devices (AMD) , as one of the major U.S. chipmaking rivals to Nvidia (NVDA) , which holds a commanding lead in the market for new AI technologies but is running into supply-chain constraints that have its major customers looking for backup relief.
Microsoft (MSFT) , Meta Platforms (META) , Google parent Alphabet (GOOGL) and Amazon are set to spend a collective total of $325 billion this year alone. Their three-year capital-spending run rate, starting in 2023, is slated to increase nearly three-fold to around $690 billion.
The group scored a major victory on that front by signing a five-year cloud computing deal with Amazon Web Services (AMZN) in December that includes the supply of custom AI chips.
Marvell's ASIC chips, known as Trainium, help hyperscalers such as AWS, as well as other large providers of cloud services and infrastructure, move large amounts of data through integrated circuits and ultimately accelerate the speed and reliability with which they process information.
For the three months ended in January, Marvell data center revenue rose 78% from the year-earlier period to $1.37 billion, with overall revenue rising 26% to $1.82 billion. Fourth- quarter earnings of 60 cents a share topped Wall Street forecasts by a penny.
Heading into its current financial year, which ends in January 2026, Marvell expects the ongoing surge in demand to power AI-related revenue past $2.5 billion.
Bullish AI revenue outlook
"We're definitely leaving this year open-ended in terms of what we can go do," CEO Matthew Murphy told investors on a conference call late Wednesday.
"Last year, we had talked about $1.5 billion," he added. "We blew through that this year and we anticipate being substantially above that. I'm not putting a number on it just yet. I think that there's a lot to go here in terms of the momentum in the business and the opportunity set in front of us."
Looking into the current quarter, however, Marvell forecast overall revenue of just $1.88 billion, most of it from its data-center business, a tally largely in line with Wall Street forecasts.
Related: Analyst has surprising words on Nvidia's stock after drop
Cantor Fitzgerald analyst C.J. Muse said the conservative guidance, against the elevated expectations for the sector's biggest players, has likely put Marvell "in the penalty box until we gain further clarity."