Marvell Technology shares fell 13.5% after the company indicated that it had pushed back the timing of monetization for its AI business serving hyperscalers. Its financial outlook was raised following strong second-quarter results and the completion of share buybacks.
Marvell Technology announced that second-quarter revenue and profit had increased, raised its revenue outlook for fiscal 2027 and fiscal 2028 on tailwinds from its data center business, and completed share buybacks totaling $4.56 billion.
However, the company indicated that it had pushed back the monetization schedule for its AI business serving hyperscalers, triggering a sharp drop in its share price in the market’s reaction.
Management said that much of the financial benefit from expanding partnerships with hyperscalers, including Google, may not emerge until around 2029. The gap between the near-term growth outlook and the long-term monetization timeline has drawn investors’ attention.
The situation has reignited discussion about the state of AI infrastructure investment for data centers and the sustainability risks surrounding hyperscalers’ continued investment in their own chips, prompting a reassessment of the company’s AI investment story.