Marvell Technology drops amid AI chip selloff

Marvell Technology fell 5.2% in morning trading on Thursday as a selloff in AI semiconductor and optical communications stocks entered its seventh consecutive session. Shares dropped to $227.31 before recovering partially to $232.55, marking a continued decline from the stock's 52-week high of $329.88.

The decline followed a September CPI reading that came in above consensus estimates, causing Federal Reserve rate-hike odds to increase and raising the cost of capital for highly valued AI hardware companies.

The optical networking sector had already begun declining earlier in the week after Broadcom's chief executive warned that access to capital could become a bigger constraint on AI expansion than chip shortages. The comment affected the entire connectivity and optical sub-sector where Marvell competes.

TSMC's CEO added to concerns during an earnings call on Thursday, telling analysts that rising component prices and macroeconomic uncertainty were challenging demand in some market segments.

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