Marvell Technology’s Weak Data Center Outlook Sparks AI Chip Concerns

Marvell Technology shares plunged nearly 13% in premarket trading after disappointing guidance on data center demand raised concerns about the AI chip sector. The company's reliance on custom chips for cloud giants like Microsoft and Amazon makes it vulnerable to inventory fluctuations.

CEO Matthew Murphy acknowledged "lumpiness" in data center revenue growth, while Morgan Stanley analysts expressed surprise at the continued decline in Marvell's ASIC business. A reported delay in Microsoft's in-house AI chip rollout to 2028 could further impact Marvell's pipeline.

The news follows Nvidia's recent earnings showing slowing data center growth, suggesting potential cooling in the AI chip market. As cloud providers adjust infrastructure spending, semiconductor firms face heightened volatility.