Marvell (MRVL) Stock Downgraded as Concerns Grow Over Amazon Trainium Transitions

Marvell Technology, Inc. (NASDAQ:MRVL) is one of the Trending AI Stocks on Wall Street. On December 8, Benchmark downgraded the stock from Buy to “Hold” following insights from a recent Silicon Valley bus tour. The firm said it is quite concerned about Marvell’s loss of Amazon’s Trainium chip.

“Following two days of extensive industry meetings during our recent Silicon Valley bus tour, we are downgrading our rating on Marvell from Buy to “Hold”, as we now have a high degree of conviction that the company has lost both Amazon’s Trainium3 and 4 designs to its Taiwanese competitor, Alchip.”

The firm believes that this conviction is the main factor in the company’s projected slowdown to only 20% XPU growth in CY26. The downgrade is likely to be “controversial,” noted the firm, particularly because Marvell has noted that it would not have an “air pocket” in revenue from Amazon.

“While we believe the company is being forthright in its guidance for increasing annual Amazon revenue, we believe this commitment is driven by expected continued Trainium2 volumes and a Kuiper low-earth orbit engagement and not the successful transition to Trainium3 designs that many on the sell-side have concluded. As Amazon’s recently announced Trainium3 is only the air-cooled version for customer evaluation, with its liquid cooled variant not expected until at least mid-next year, we expect 2026 Trainium2 volumes to continue to support Marvell’s near-term forecasts.”

The firm advises investors to lock-in short term gains before the stock experiences a pull-back.

“Accordingly, with Marvell’s shares performing exceptionally well following its earnings report, we recommend investors take near-term profits on an overly optimistic misread of the company’s recent signals toward Amazon stability.”

Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.

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