Marvell Technology slides on AI spending concerns

Marvell Technology fell nearly 5.0% in morning trading Thursday to reach $232.62 as a selloff hit U.S. optical communications and AI-linked semiconductor stocks. The decline began in pre-market trading and continued into the regular session.

Marvell was part of a group of sector companies that dropped more than 5% before the open. Lumentum, Credo Technology, Coherent, and Ciena also fell over 5% during the same period.

The selloff stems from investor concerns about the sustainability of AI infrastructure spending. Senior executives at major chip companies recently warned that capital access has become a greater constraint on AI expansion than chip availability. Rising borrowing costs are also clouding the return on AI investments, according to these warnings.

Marvell derives most of its revenue from data center customers and has set long-term revenue targets tied directly to hyperscaler AI spending. The company's elevated valuation multiples increase the impact of negative sentiment shifts.

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