Marvell Technology (MRVL, Financials) shares fell 17% to $74.75 as of 11:19 a.m. GMT-5 on Thursday, shedding $15.39 after the semiconductor company posted strong quarterly earnings but raised investor concerns over growth sustainability and weakness in key business segments.

• Warning! GuruFocus has detected 4 Warning Signs with MRVL.

Marvell's income rose 27% year over year to $1.82 billion for the fourth quarter, which ends Feb. 1, somewhat above experts' projection of $1.8 billion. At $0.60, adjusted profits per share were above the estimated $0.59.

Contributing most of the firm's overall income and somewhat exceeding projections of $1.36 billion, the data center revenue of the company jumped 78% year over year to $1.37 billion. Other groups, meanwhile, showed significant reductions. Carrier infrastructure income down 38% to $105.8 million; consumer revenue dropped 38% year over year to $88.7 million. While automotive and industrial sales were at $85.7 million, signaling possible long-term development possibilities, enterprise networking recorded $171.4 million, exhibiting relative stability.

Within a 5% range and somewhat above the estimated $1.869 billion, Marvell forecast income of $1.875 billion for the first quarter of fiscal 2025. The firm projects a good profitability based on a GAAP gross margin of 50.5% and an adjusted gross margin of 60%. Projected at $0.61 per share ($0.05), adjusted EPS somewhat above consensus projections of $0.60.

Investors responded adversely even though Marvell exceeded forecasts, most likely because of worries about Marvell's reliance on data center expansion and the ongoing deterioration in other industry sectors. The sharp revenue decreases in consumer and carrier infrastructure industries draw attention to possible difficulties for the company's varied revenue stream.

The sell-off could possibly have been influenced by more general industry worries. After-hours trading dropped 2.4% in competitor Broadcom (AVGO, Financials), indicating market-wide semiconductor industry caution in view of macroeconomic uncertainty.

In the application-specific integrated circuit industry, a vital sector for cloud computing and AI-driven devices, Marvell faces up against Broadcom. With supply chain problems and changing demand cycles influencing big firms as Nvidia (NVDA, Financials) and AMD (AMD, Financials), the semiconductor sector has shown instability.

Although Marvell's data center division keeps generating income, investors seem to be challenging its long-term viability and the company's capacity to overcome difficulties in other corporate lines. The 17% stock decline shows more general worries about profitability, demand patterns, and general semiconductor industry instability.