The stock market is showing it will punish any company that can't keep up with AI spending

The move: Marvell Technologies fell as much as 18% on Friday after an earnings report that missed forecasts.

The stock has had a tough 2025, now having fallen 42% year-to-date. The weak performance follows a 198% rally across 2023 and 2024.

Why: Marvell reported data-center sales for the second quarter that missed the consensus analyst target. It also gave a revenue outlook that fell short of expectations.

The report stands in contrast to sector-leader Nvidia‘s strong report from earlier in the week, which did well to relieve worries of an AI bubble or spending slowdown.

What it means: Nvidia established that AI spending is going to continue going strong, a notion that Wall Street agreed with as firms rushed to raise their price targets on the stock after earnings.

Marvell’s recent-quarter performance and outlook suggest that they’re not getting in on that spending to the degree investors would like.

overall strong earnings, making it clear that AI spending will likely remain strong through the coming quarter. This is bad news for Marvell after its earnings report highlighted concerns regarding its data center growth.

“Marvell’s in-line 2Q sales and miss on 3Q top-line guidance — particularly on data center — may disappoint and pressure near-term sentiment, given strong AI demand and intensive capital spending from hyperscalers,” Bloomberg Intelligence wrote after the report.

The analysts added that “a clearer update on long-term AI fundamentals, 2026 trajectory and added design-win visibility with the top 10 AI customers is likely needed to alleviate concerns.”

Until that happens, though, Marvell will likely have a difficult time convincing investors not to count it out, particularly if Wall Street sentiment continues to shift in a negative direction. Bank of America has already downgraded it to a neutral rating.