Marvell Shares Will Take a Hit After Investor Day Surprise

In an 8K filed with the SEC on Wednesday night, citing a "dynamic macroeconomic environment" as global trade tensions generate economic uncertainty, Marvell MRVL announced it would postpone its upcoming 2025 Investor Day slated for June 10.

While a future date for that Investor Day is worked out, Marvell will conduct a webinar on June 17 showcasing the company’s custom AI infrastructure that will include a Q&A session. Marvell also reaffirmed and narrowed the midpoint of its revenue outlook for the current quarter to $1.875 billion, within a range of plus or minus 2%, compared to the prior range of plus or minus 5%.

The postponing of an Investor Day, an event during which a company’s management team gives a high-level strategic review and outlook, is never well received by Wall Street. While we can understand the rationale given the growing number of companies that have pulled full-year 2025 guidance and appreciate the narrowed guidance for the current quarter, this will weigh on MRVL shares near term.

However, we are pleased that the company is conducting its June 17 event, as it should bring some incremental color around Marvell’s custom AI chip efforts with Amazon AMZN, Meta META, Alphabet GOOGL and Microsoft MSFT. This should help Wall Street wrap its head around management’s comment that it expects to be “substantially above” the $2.5 billion in AI-related business for this year that it laid out at its 2024 Investor Day.

Coming off the reiterated 2025 capital spending levels by those companies, as well as the comments we shared from American Electric Power AEP and Duke Energy DUK on Tuesday, the outlook for Marvell’s AI and data center segment (72% of 2024 revenue) remains robust. Where there could be some customer hesitancy is at Marvell’s Enterprise and Carrier Infrastructure segments (16% of 2025 revenue) as companies look to trim back spending. Trump tariffs and the uncertainty they bring are a headwind for the company’s Consumer segment, but that business is a relatively small one for Marvell (5% of 2024 revenue).

To us, the Marvell story near-term is very much predicated on AI and data center, but as we’ve discussed, ongoing AI adoption will drive spending in Enterprise and Carrier Infrastructure as those networks become congested. Figures point to a Google Search consuming 0.2 megabytes (MB) to 0.5 MB of data, while an AI search conducted via ChatGPT or Perplexity consumes 10 MB to 100 MB. That’s already a significant increase in data consumption, but on top of that we need to consider that, as of February, ChatGPT alone had 400 million weekly users, up from 300 million exiting 2024, and it is expected to more than double before the end of 2025. Factor in other AI tools and their adoption, and this means Enterprise and Carrier customers can only hold off addressing capacity demands for so long.

Following the market’s digestion of the Investor Day postponement, more than likely, Marvell shares will trade sideways at least until the June 17 event. We’ll continue to focus on the longer-term story. The Portfolio picked up MRVL shares in the mid-$50s twice in April, and should we see the shares retrace back to those levels or slightly lower, it would be a nice pick-up spot for members, and we may do a little nibbling for the Portfolio as well.

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At the time of publication, TheStreet Pro Portfolio was long MRVL, AMZN, META, GOOGL and MSFT.