Here's Why Marvell Technology (MRVL) Traded Down in Q1

Fidelity Investments, an investment management company, recently released its “Fidelity Dividend Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Fidelity Dividend Growth Fund is a diversified domestic equity strategy with a focus on large-cap core. The portfolio invests in large and mid-cap firms with potential for sustainable dividend growth. The fund’s Retail Class shares gained -5.29% in the first quarter, underperforming the -4.27% return of the benchmark S&P 500 index. In the first quarter, the post-election anticipation was replaced by investor concerns regarding the impacts of several actions from the new administration, disruptions to government programs, and rising uncertainty caused by changing policy priorities, particularly in trade tariffs. In addition, you can check the fund’s top 5 holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Fidelity Dividend Growth Fund highlighted stocks such as Marvell Technology, Inc. (NASDAQ:MRVL). Marvell Technology, Inc. (NASDAQ:MRVL) provides semiconductor solutions for data infrastructure. The one-month return of Marvell Technology, Inc. (NASDAQ:MRVL) was 30.10%, and its shares gained 12.63% of their value over the last 52 weeks. On June 26, 2025, Marvell Technology, Inc. (NASDAQ:MRVL) stock closed at $79.97 per share, with a market capitalization of $68.95 billion.

Fidelity Dividend Growth Fund stated the following regarding Marvell Technology, Inc. (NASDAQ:MRVL) in its Q1 2025 investor letter:

"At the stock level, out-of-benchmark exposure to Marvell Technology, Inc. (NASDAQ:MRVL) topped our list of relative detractors. The stock returned-43% for the past three months. In early March, the provider of data infrastructure and semiconductor solutions reported slightly better than-expected fiscal Q4 earnings. However, in an environment of high valuations and elevated expectations for artificial intelligence related solutions providers, analysts said that the company's quarterly datacenter business results – which were in line with consensus views – likely proved somewhat disappointing and contributed to the stock's decline. That said, much of the downward pressure on shares came earlier in the year, when a Chinese generative AI startup, DeepSeek, released a free large language model that was cheaper to develop, raising questions about spending on AI infrastructure and the valuations of the biggest players, including chipmakers."

Marvell Technology, Inc. (NASDAQ:MRVL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 73 hedge fund portfolios held Marvell Technology, Inc. (NASDAQ:MRVL) at the end of the first quarter, which was 105 in the previous quarter. Marvell Technology, Inc. (NASDAQ:MRVL) reported a record revenue of $1.895 billion in the first quarter of fiscal 2026, marking a 4% sequential increase and strong 63% year-over-year growth. While we acknowledge the potential of Marvell Technology, Inc. (NASDAQ:MRVL) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Marvell Technology, Inc. (NASDAQ:MRVL) and shared the list of stocks Jim Cramer put under the microscope recently. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of MRVL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.