Marvell Technology MRVL stock has plunged 34% year-to-date, lagging behind the Nasdaq 100 Index, which Marvell is a part of, by nearly 9% during the period. The index’s gain reflects the upside of key constituents such as Nvidia NVDA, Microsoft MSFT, Apple AAPL and other Big Tech giants, including Broadcom AVGO.
Why Is Marvell Technology Stock Falling In 2025?
In February, Bank of America Securities analyst Vivek Arya highlighted that Application-Specific Integrated Circuits (ASICs) are winning over a 10%-15% share of the overall accelerator market, despite Graphics Processing Units (GPUs) commanding over an 80% share, courtesy of AI compute and networking demand.
Also Read: Marvell Launches New Power Regulator And 2nm Memory Chips To Boost AI, Cloud Efficiency
This indicates Marvell’s relatively lower Total Addressable Market as an ASIC vendor.
ASIC vendor Marvell competes directly with Broadcom in areas like data center infrastructure and custom AI chips. Broadcom has surged 18% year-to-date.
Known for its GPUs, Nvidia is a strong competitor in the data center market, alongside Advanced Micro Devices AMD, with which Marvell also has a presence. Nvidia has gained 24% year-to-date, and AMD has gained 19%.
What Analysts Have To Say About Marvell Technology
On May 30, TD Cowen analysts argued that the traditional debate between traditional GPUs and ASICs is outdated. Instead, they suggest reframing it as merchant versus custom silicon, since modern datacenter GPUs are ASICs optimized for AI workloads.
They emphasized that the decision to build custom silicon or buy merchant chips should be viewed through a “build versus buy” ROI framework, with performance being the key driver of internal rate of return (IRR) and production scale potential. TD Cowen’s custom model compares GenAI hardware investments by evaluating their revenue potential against cost and performance trade-offs.
The firm expected merchant and custom accelerators to coexist, with hyperscalers balancing risk and reward across both approaches. However, they note that custom silicon faces binary outcomes—either it outperforms and scales or fails to justify further investment. While custom chips may grow to 15% of a projected $334 billion accelerator market by 2030, merchant platforms will likely remain dominant, growing from a larger base at a steady 18% CAGR.
Ultimately, TD Cowen concludes that performance, not generality or specialization, will determine which chips succeed, and every new generation will face a fresh round of ROI scrutiny.
On May 8, JPMorgan analyst Harlan Sur reaffirmed his confidence in Marvell citing its ongoing AI chip projects with Microsoft MSFT and Amazon.com AMZN, noting no signs of disruption and reiterating his $4 billion AI revenue estimate for 2025, driven by strong growth in custom AI chips and networking.
Following Marvell’s Custom AI Investor Event on June 17, Needham and JPMorgan analysts highlighted Marvell’s increased 2028 Data Center TAM forecast to $94 billion, up from $75 billion. They emphasized the Custom XPU segment, which is expected to grow at a 90% CAGR through 2028, outpacing the broader market.
Additional Macroeconomic Tailwinds
Marvell is poised to benefit from recent U.S. policy changes supporting the semiconductor industry.
Donald Trump’s “Big Beautiful Bill” boosts the semiconductor investment tax credit from 25% to 30% through 2026, encouraging chipmakers to expand domestic production. This expansion could increase demand for Marvell’s custom chips and networking technologies.
Price Action: MRVL stock was trading lower by 0.80% to $72.77 at last check Friday.
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