What Happened?

Shares of networking chips designer Marvell Technology (NASDAQ: MRVL) fell 16.9% in the morning session after the company reported its financial results for the second quarter of calendar year 2025 and provided a disappointing outlook for the third quarter. 

For the quarter, the semiconductor company's revenue of $2.01 billion and non-GAAP earnings per share of $0.67 were both in line with Wall Street's expectations. Despite meeting current-quarter estimates, investors were focused on the future. The company's guidance for third-quarter revenue of $2.06 billion fell short of analysts' consensus estimates of $2.1 billion. The sharp negative market reaction indicates that this weaker-than-expected forecast overshadowed the in-line results, raising concerns about the company's near-term growth trajectory.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Marvell Technology? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Marvell Technology’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. But moves this big are rare even for Marvell Technology and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 9 days ago when the stock dropped 3.5% on the news that the major indices continued to pull back, with technology stocks accounting for most of the market's largest decliners. A key reason for this trend is that much of the recent market gains were concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed. 

Despite the downturn, some analysts viewed this as an opportunity to own some of the "Core AI winners." Dan Ives of Wedbush Securities commented, "In our view, the tech bull cycle will be well intact for at least another 2-3 years, given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor roadmap." Additionally, mixed earnings reports from retailers, such as Target, have added to the market's weakness. Investors are closely monitoring these reports for insights into the broader economic health and the potential impact of new tariffs on inflation.

Marvell Technology is down 44.2% since the beginning of the year, and at $63.40 per share, it is trading 49.7% below its 52-week high of $126.06 from January 2025. Investors who bought $1,000 worth of Marvell Technology’s shares 5 years ago would now be looking at an investment worth $1,635.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.