Marvell leads chip wreck unseen since the pandemic

Three trading days earlier, Marvell Technology (MRVL) had the market in awe.

Nvidia chief executive Jensen Huang had stood on a stage in Taipei and called the chip designer “the next trillion-dollar company.” Traders responded by handing the stock its biggest one-day gain ever.

By Thursday’s close, Marvell sat at a record high.

By Friday’s close, it was the worst-performing large chip stock on the market.

The crash started in the rest of the sector, and Marvell had the most room to fall.

When a stock climbs that far, that fast, on hope rather than fresh numbers, it keeps little cushion once the mood turns.

Friday was the day the mood turned, and it turned hard across the entire chip complex.

Marvell stock leads the worst chip sell-off since the 2020 crash

Marvell (MRVL) shares fell more than 16% Friday, closing at $263.47 after trading at a record $316.43 the day before.

That single drop pulled the iShares Semiconductor ETF down about 10%, its weakest session since March 2020, according to congress.net.

More AI chip stocks:

The damage was widespread.

Micron (MU) fell 13%, Intel (INTC) and AMD each lost around 11%, and Nvidia (NVDA) slid 6%, briefly dropping below a $5 trillion valuation, the same report noted.

Across the group, chip stocks were on track to shed roughly $1 trillion in combined market value in a single session.

How a trillion-dollar call set Marvell up for the fall

The setup for Friday’s drop was built over the previous two weeks.

Marvell reported record first-quarter fiscal 2027 revenue of $2.418 billion on May 27, up 28% from a year earlier, and guided current-quarter sales to $2.7 billion, its earnings release shows.

Then came Huang.

Speaking beside Marvell CEO Matt Murphy in Taipei, the Nvidia boss called Marvell the next trillion-dollar company, and the stock jumped about 32% in a day, CNBC reported.

Nvidia had also recently put about $2 billion into Marvell, CNBC noted, deepening the partnership between the two chipmakers.

By Friday, Marvell was up roughly 223% for the year, according to financial data tracked by Yahoo Finance.

It is worth knowing that a stock priced with high expectations has little protection when sentiments begin to crack.

What actually broke the AI chip trade on Friday

Two things hit at once.

Broadcom (AVGO) reported earnings on June 3 but declined to raise its 2026 AI chip revenue forecast, CNBC reported, and the stock fell about 12% the next day.

Investors read the steady guidance as a ceiling on AI spending growth.

Related: Jim Cramer sounds the alarm on Marvell

Then, on Friday, the May jobs report showed the economy added 172,000 jobs, far above the roughly 80,000 expected, the Bureau of Labor Statistics reported and CNBC confirmed.

Strong hiring pushed Treasury yields higher and erased near-term hopes of a Federal Reserve rate cut, according to Morningstar.

Here is why that matters for chips:

High-growth stocks are valued on profits expected years from now. When yields rise, those future profits are worth less in today’s dollars, so the priciest names tend to fall the hardest.

What Marvell investors should watch from here

Marvell still trades at a high price.

Its price-to-earnings ratio, which measures how much investors pay for each dollar of profit, sits near 90, against a five-year median closer to 30, according to GuruFocus.

That gap leaves little margin for disappointment.

Even longtime Wall Street fans of the company flashed caution after the Huang-driven spike, with CNBC’s Jim Cramer telling viewers not to chase it.

Three things the bulls need to see next

• Hard revenue behind the AI story, not just a famous endorsement, when Marvell reports its next quarter.

• Steadier guidance from peers, since Broadcom’s flat AI outlook was the spark that lit this selloff.

• A calmer bond market, since rising yields keep pressure on every richly valued chip name.

None of this guarantees a quick bounce.

Marvell remains a long-term bet on AI networking, the high-speed plumbing that links chips inside data centers.

Friday was simply a reminder of what happens when a stock’s price races far ahead of the profits the company actually earns.

The further that gap stretches, the more a stock can fall on a single bad day, and no endorsement, even from the most famous name in chips, closes it.

Related: Barclays resets Marvell stock price target after earnings

This story was originally published by TheStreet on Jun 7, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.