Marvell Stock Slides After Benchmark Downgrade MRVL

Marvell Technology, Inc. (MRVL) shares fell after Benchmark downgraded the company to Hold on Dec. 8, 2025, citing a high degree of conviction that Marvell lost Amazon Web Services’ (AWS) Trainium3 and Trainium4 custom AI chip sockets. The move followed reports that Microsoft is in talks to co-design custom AI chips with Broadcom, raising questions about Marvell’s role in future Azure silicon.

Benchmark Downgrade and AWS Trainium Risk

Benchmark downgraded Marvell from Buy to Hold and withdrew its price target, arguing that Marvell lost AWS’s Trainium3 and Trainium4 custom accelerator designs to competitor Alchip. The firm warned that AWS might shift orders to other suppliers, threatening Marvell’s custom AI chip revenue.

A technical analysis circulated alongside the downgrade said Marvell designed Trainium2 but lost the Trainium3 design competition to Alchip. It attributed this to execution issues and delays on Trainium2, including problems with the redistribution-layer (RDL) interposer. The analysis also noted that Trainium projects generally offer smaller profit margins for design partners than Broadcom’s ASIC deals, due to AWS’s focus on total cost of ownership.

Some analysts counter that Marvell’s FY2027 custom-chip forecast already includes Trainium3 orders, implying continued involvement with AWS. They point to management guidance and sell-side modeling that incorporate these assumptions despite customer confidentiality.

Microsoft-Broadcom Talks and Analyst Perspectives

Reports beginning Dec. 6 described Microsoft in talks to co-design custom AI chips with Broadcom, signaling a possible shift from prior collaboration with Marvell. A regional report added that Microsoft had worked with Marvell on custom silicon but is now exploring a new partnership as AI demand grows. These accounts suggest a potential reallocation of Microsoft’s Azure custom ASIC work away from Marvell, though no SEC filings, regulatory approvals, or company disclosures have confirmed this.

JPMorgan reaffirmed an Overweight rating and a $130 price target on Marvell, dismissing concerns about share losses in custom AI chip engagements. The firm cited multi-year partnerships and testimonials from Microsoft’s Azure hardware leadership at Marvell’s June 17 Custom AI Analyst Day as evidence of a strong ongoing relationship.

Industry commentary emphasizes that Marvell’s longer-term AI opportunity depends more on optical interconnects and high-speed networking than on any single custom chip design. Analysts note hyperscalers increasingly multi-source proprietary accelerators, which raises competition for custom ASIC work but expands demand for the copper-to-optical links and switch-level interconnects Marvell supplies.

The downgrade crystallizes near-term risk around Marvell’s custom ASIC exposure, even as parts of the sell side highlight durable optical and networking revenue tied to multi-year hyperscaler agreements. Investors must weigh potential revenue shifts against Marvell’s broader AI and optics positioning.