Marvell (MRVL, Financial) shares dropped 6% after reporting its Q1 results, despite showing revenue growth of 63.3% year-over-year to $1.90 billion, slightly exceeding expectations. The Q2 guidance was in line, with strong AI demand boosting its Data Center market. Additionally, Marvell is witnessing recovery in Carrier Infrastructure and Enterprise Networking markets.
- Data Center sales, accounting for 76% of Q1 revenue, increased 76% year-over-year and 5% sequentially to a record $1.44 billion. Growth is driven by scaling custom AI silicon programs and strong electro-optics product shipments for AI and cloud. Marvell anticipates mid-single digit sequential growth in Q2.
- AI remains a strong growth driver, with significant capital expenditure plans from hyperscalers and new sovereign data center announcements.
- Enterprise Networking sales increased 16% year-over-year to $177.5 million, while Carrier Infrastructure soared 93% to $138.4 million. Combined, EN+CI revenue grew 14% sequentially, surpassing guidance midpoint. Marvell expects mid-single digit sequential growth in Q2.
- Consumer sales rose 50% year-over-year but dropped 29% sequentially to $63.1 million. Automotive/Industrial declined 2% year-over-year to $75.7 million.
Investors were disappointed with Marvell's Q1 report and guidance, viewing it as lackluster compared to Nvidia's (NVDA, Financial) recent performance. Despite Marvell's stock having declined significantly since January, investors expected stronger Q2 guidance following positive reports from peers like NVDA and Dell (DELL, Financial).
