Shares in Marvell Technology Inc. fell in late trading today despite the semiconductor maker reporting earnings and revenue just ahead of expectations in its latest quarter.

For its fiscal second quarter that ended July 29, Marvell reported adjusted earnings of $290.2 million, or 33 cents per share, down from $486 million, or 57 cents per share, in the same quarter of last year. Revenue rose almost 12%, to $1.341 billion. Both were slight beats, as analysts had expected earnings per share of 32 cents and revenue of $1.33 billion.

The decline in Marvell’s overall figures was driven by a 29% year-over-year drop in data center revenue, which came in at $459.8 million versus $643.4 million a year prior. Marvell’s enterprise network and carrier infrastructure segment saw smaller declines, dropping 4% and 3% year-over-year to $327.7 million and $275.5 million, respectively.

Not all of Marvell’s markets saw declines, with the company’s automotive and industrial segment growing 32% year-over-year, to $110.2 million, and its consumer business growing 2%, to $167.7 million.

As of the end of the quarter, Marvell’s data center business now accounts for 34% of the company’s revenue, down from 42% a year prior. Enterprise networking accounted for 24%, up from 22%, carrier infrastructure 21%, consumer 13% and automotive/industrial 8%.

Marvell designs and sells data storage and networking chips that are primarily purchased by cloud computing providers and companies in the automotive and communications industries. As noted in May, though Marvell is smaller than Intel Corp. and Nvidia Corp., the company is rapidly emerging as a player in the rapidly growing artificial intelligence market thanks to its networking chip capabilities.

AI is seen as a key driver for the company going forward. Chairman and Chief Executive Officer Matt Murphy said in Marvell’s earnings release that “demand from AI applications continues to strengthen, driving our overall revenue outlook from AI for this fiscal year even higher than previously outlined.”

For its fiscal third quarter, Marvell said it expects adjusted earnings per share of 40 cents, plus or minus five cents, on revenue of $1.4 billion. The 40-cent-per-share figure was in line with analysts’ expectations, while the revenue outlook was slightly ahead of an expected $1.39 billion.

Though not spectacular, Marvell’s results were solid across the board and yet the company saw its share price drop over 5% in late trading.

The results come a day after Nvidia Corp. smashed expectations in its latest earnings report and its stock rose to a record high, so Marvell may have suffered in the comparison by investors. Both companies are chasing similar markets, but while Nvidia is highly successful in riding the AI wave, Marvell is arguably a laggard by comparison.

Photo: Marvell