Marvell Technology (NASDAQ:MRVL) shares fell 7.9% in pre-market trading after the chipmaker reported fiscal second-quarter results that exceeded revenue and earnings expectations and raised its full-year outlook.

The company reported Q2 FY2027 revenue of $2.739 billion, representing a 37% increase from the previous year, while non-GAAP earnings per share reached $0.94. Both figures were above Wall Street expectations, according to the source material.

Marvell raises FY2027 and FY2028 revenue outlook

Marvell increased its FY2027 full-year revenue outlook to approximately $12 billion and set its FY2028 revenue target at around $18 billion.

The company has also signed a major new artificial intelligence chip agreement with Google. However, the source material said investors had been looking for a larger increase in Marvell’s longer-term revenue expectations following the agreement.

The reported share-price decline therefore came despite the company’s stronger quarterly results and increased revenue forecasts.

Q3 gross margin expected to decline sequentially

Marvell guided for a non-GAAP gross margin of between 57.5% and 58.5% for the third quarter.

At the midpoint, the forecast represents a sequential decline of approximately 90 basis points.

The source material attributed the expected reduction to a growing contribution from custom AI silicon, which carries lower margins than the company’s standard products.

Data centre revenue reaches record $2.17 billion

Data centre revenue reached a record $2.17 billion during the second quarter, increasing 46% year over year.

Marvell expects data centre revenue to grow approximately 75% year over year in the third quarter, highlighting continued expansion in this part of the business.

Broader technology market remains subdued

The wider market provided a relatively muted backdrop, with the Nasdaq down 0.4% while the S&P 500 was broadly unchanged.

Semiconductor companies including Broadcom and Micron were also trading against a more measured backdrop following previous gains across the sector.

Marvell Technology stock price