Marvell Technology $MRVL ( ▲ 0.26% ) is under heavy pressure, falling 9 percent this morning as investors try to make sense of swirling rumors around its two biggest custom chip customers.
The selloff started late last week after a report from The Information suggested Microsoft, Marvell’s second-largest hyperscaler client, is exploring a switch to Broadcom for future chip designs. Now the focus has shifted to Amazon $AMZN ( ▲ 0.87% ).
Benchmark analyst Cody Acree says the situation is worse than investors realize. In a new note, he writes that he now has a high degree of conviction that Marvell has lost Amazon’s Trainium3 and Trainium4 designs to Taiwan-based Alchip, its competitor in ASIC manufacturing. Acree cut the stock to hold from buy and urged investors to lock in recent post-earnings gains.
Not everyone agrees. JPMorgan’s Harlan Sur pushed back, pointing to Marvell’s acquisition of Celestial AI as a strong signal that the company remains aligned with Amazon’s future chip roadmap.
The debate intensified during Marvell’s latest earnings call. When asked about Amazon specifically, CEO Matt Murphy said the transition from its current lead XPU customer to the next one is already reflected in Marvell’s forecast, adding that backlog and visibility remain strong. Acree interpreted the response as less definitive than Marvell intended.
His view is that Marvell’s revenue outlook is being supported by ongoing Trainium2 shipments and Amazon’s Kuiper satellite engagement, not by a clean handoff to Trainium3 designs as many analysts have assumed.
Investors clearly want clarity, and until Marvell confirms who is designing what, the stock may stay in the penalty box.