Marvell Stock Has Been Cut in Half. Its Biggest Fear May No Longer Be Valid.

Marvell Technology (MRVL) has taken a beating this past month, with MRVL stock nearly halving from its 52-week high this week. Part of the move is due to a broad selloff across chip stocks as investors grow nervous about AI spending. Joining the S&P 500 ($SPX) on June 22 gave MRVL stock a lift, but once the index-driven buying finished, it faded just as fast. Then, on July 15, Erste Group downgraded Marvell stock to a “Hold” rating, warning that the name had run too far ahead of itself. None of the fall was about the business. Even Erste Group called the guidance strong. The fall in MRVL stock was about price, not performance.

However, there is one company-specific worry that has hung over Marvell for months, although it has been quietly fading. That worry is Amazon (AMZN). Back in December, Benchmark analyst Cody Acree claimed Marvell had lost the design work for Amazon’s next Trainium AI chips to a Taiwanese rival. With Amazon being one of Marvell’s largest custom-chip customers, investors worried that this would be a serious blow to the company. But the claim was disputed from the start. JPMorgan pushed back at the time, and the evidence since has also pointed the other way.