Marvell Technology (MRVL) reported significant growth driven by its custom AI silicon chips, utilized for high bandwidth memory and electro-optic solutions. However, the company faced a gross margin decline, with its non-GAAP gross margin falling 10 basis points sequentially to 58.9% in Q1 of fiscal 2027. For Q2 of the same fiscal year, Marvell has projected a non-GAAP gross margin between 58.25% and 59.25%, indicating stagnant growth.
The gross margin contraction is compounded by competitive pressures from major players like Broadcom (AVGO) and Advanced Micro Devices (AMD). Broadcom’s semiconductor segment grew 11% year over year in Q1 of fiscal 2025, while AMD is advancing with its custom silicon solutions aimed at enhancing data center performance.
Year-to-date, Marvell’s shares have increased by 141.1%, outperforming the Zacks Electronics – Semiconductors industry’s growth of 51.7%. The Zacks Consensus Estimate predicts MRVL’s earnings growth of 34.5% and 41.1% for fiscal 2027 and 2028, respectively.
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