Marvell Technology Inc (NASDAQ:MRVL) stock fell 7.34% (As on August 25, 11:46:47 AM UTC-4, Source: Google Finance) after the company posted a fall in second-quarter revenue, as weak enterprise market along with economic uncertainty weighed on demand for its chips and networking hardware. The company is forecasting sequential revenue growth to accelerate in the third quarter. This growth is being driven primarily by AI and cloud infrastructure. Non-GAAP net income for the second quarter of fiscal 2024 was $290.2 million. Cash flow from operations for the second quarter was $112.5 million. Meanwhile, companies are holding off on upgrades to their technology infrastructure as an uncertain economic outlook clouds future prospects. Marvell’s recovery in China has been weak as American legislation restricted the exports of certain chips to the Asian country in October last year.

MRVL in the second quarter of FY 24 has reported the adjusted earnings per share of 33 cents, beating the analysts’ estimates for the adjusted earnings per share of 32 cents. The company had reported 12 percent fall in the adjusted revenue to $1.34 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $1.33 billion. The company delivered 60.3% as non-GAAP gross margin. 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%.

The company, which makes equipment such as switches and adaptors, projected revenue of $1.40 billion, plus or minus 5%, for the third quarter, the lower end of which is below analyst expectations of $1.39 billion. Marvell forecast per share earnings of 40 cents, plus or minus 5 cents for the third quarter, which was in line with expectations, according to Refinitiv data. Q3 FY 24 Non-GAAP gross margin is expected to be 60.3% – 61.3%  and Non-GAAP operating expenses are expected to be $435 million – $440 million