Marvell stock falls on Microsoft-Broadcom talks and Amazon design loss fears

Investing.com -- Marvell Technology (NASDAQ: MRVL) stock fell 6% Monday following reports that Microsoft is in discussions with Broadcom about custom chip designs and a Benchmark analyst downgrade over concerns about losing Amazon’s business.

The Information reported that Microsoft is in talks with Broadcom to design future custom chips, potentially shifting business away from Marvell.

Adding to Marvell’s challenges, Benchmark analyst Cody Acree downgraded the company from Buy to Hold, citing "a high degree of conviction" that Marvell has lost Amazon’s Tranium 3 and 4 chip designs to Taiwanese competitor Alchip. This loss could explain why Marvell projects XPU growth of only 20% in calendar year 2026.

"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 Tranium 3 and 4 designs to its Taiwanese competitor, Alchip. We expect this is the primary factor in the company’s projected slowing to only 20% XPU growth in CY26," wrote Acree.

The analyst noted that while Marvell has indicated it won’t experience an "air pocket" in revenue from Amazon next year, this may be due to continued Tranium 2 volumes rather than successful transition to newer designs.

The Information also reported that Marvell recently attempted to secure more business from Meta Platforms by waiving part of an up-front engineering fee for chip design, with Meta planning to launch this chip in 2027.

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