Chipmaker Marvell forecasts downbeat quarterly revenue, shares fall

(Reuters) -Chipmaker Marvell Technology forecast third-quarter revenue below Wall Street estimates on Thursday, as economic uncertainty and tariff concerns weighed on customer spending and overall demand.

Shares of the company, which manufactures custom chips to power AI workloads, fell over 8% in extended trading.

Chipmakers are facing tough investor scrutiny as Wall Street's lofty expectations around artificial intelligence leave little room for disappointment.

Marvell enables AI deployments that support demand for hyperscalers. The broad adoption of genAI is driving increased demand for custom chips, as enterprises advance their technology strategies and continue to expand AI workloads.

Persistent inflation and economic uncertainty have led customers to delay purchases, resulting in weak demand at Marvell's automotive and industrial and carrier infrastructure end markets.

Chip giant Nvidia's CEO Jensen Huang on Wednesday dismissed concerns about an end to a spending boom on AI chips and said opportunities will expand into a multi-trillion-dollar market over the next five years.

Nvidia said it sees revenue of $54 billion, plus or minus 2%, for the third quarter, compared with analysts' average estimate of $53.14 billion.

Marvell expects quarterly revenue of $2.06 billion, plus or minus 5%, compared with analysts' average estimate of $2.11 billion, according to data compiled by LSEG.

For the second quarter, ended August 2, Marvell posted revenue of $2.01 billion, in line with analysts' estimates.

The data center segment, Marvell's largest, posted revenue of $1.49 billion for the quarter, below estimates of $1.51 billion.

(Reporting by Juby Babu in Mexico City; Editing by Alan Barona)

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