Marvell stock drops as persistent supply constraints weaken data-center forecast

Marvell Technology Inc. shares fell in the extended session Thursday after the chip maker forecast data-center sales for the third quarter that fell well short of Wall Street’s expectations due to supply constraints that aren’t expected to ease until the fourth quarter.

shares fell 3.4% after hours, following a 5.5% climb in the regular session to close at $55.09. Shares are down 37% year to date, compared with a 25% fall by the PHLX Semiconductor Index 
and a 12% decline by the S&P 500 index 

Marvell forecast adjusted earnings of 56 cents to 62 cents a share on revenue of $1.51 billion to $1.61 billion for the third quarter. Analysts had estimated earnings of 61 cents a share on revenue of $1.58 billion for the third quarter.

“We continue to see healthy demand for our products, with the exception of consumer HDD, and our overall demand is outpacing supply,” Matt Murphy, Marvell’s chief executive, told analysts on a conference call. Murphy said he expects sequential revenue growth to accelerate in the fourth quarter as supply constraints begin to ease.

“In data center, year-over-year, we are expecting revenue growth of over 20%, driven by our cloud end market,” Murphy said on the call. “Due to the complex nature of products for this end market, we expect supply challenges in the third quarter to impact our ability to fully meet the demand on a sequential basis.”

That’s right on the heels of chip giant Nvidia Corp.
forecasting late Wednesday that third-quarter sales would likely fall about $1 billion short of Wall Street’s expectations. Nvidia also took a $1.22 billion inventory charge ahead of the release of its next-generation chip architecture, “Lovelace,” and analysts speculated on whether this was the bottom or whether data-center sales would weaken also.

“We expect our data-center revenue in the fourth quarter to increase on a sequential…


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