Marvell Stock Fell 58% From Its Record. History Says What Followed Its Last 4 Drops This Deep.

Marvell Technology (NASDAQ:MRVL) stock had a terrible start to November. On Nov. 2, shares dropped around 13% as the chip designer agreed to buy optical parts maker Lumentum Holdings in an all-stock deal.

The slide went on after the Nov. 3 elections sparked worries that new state limits might slow the building of artificial intelligence (AI) data centers. On Nov. 5 alone, the stock lost 16%.

At its $133.55 close that day, Marvell sat about 58% off its record close of $316.43 on June 4.

A drop this deep isn't new to Marvell. Since its stock began trading in June 2000, it's fallen 55% or more from a record close four other times, going by split-adjusted daily closing prices. Twice, it needed over five years to get back to a record. The other two times, it was back at one within around three years of its high.

What type of drop is this one?

Image source: The Motley Fool.

Two long waits

Marvell's first crash came during the dot-com bust. The stock sank around 92% from its Sept. 13, 2000, record close to its low on April 4, 2001.

And a 58% loss, which it hit in November 2000, was nowhere near the bottom. After that, shares dropped around 80% more.

The business wasn't the issue. Showing how fast Marvell was growing then, its revenue doubled to $288.8 million in the fiscal year ended Jan. 31, 2002, helped by its purchase of networking chip designer Galileo Technology. By fiscal 2006 (ended Jan. 28, 2006), revenue had hit around $1.7 billion. Even so, the stock didn't close at a new record until November 2005, over five years after its peak.

I'd say the 2000 share price had run so far ahead of the business that even growth like that needed years to catch up.

The second drop took much longer to make up. From a record close on Jan. 27, 2006, shares sank around 87% by Nov. 20, 2008, in the financial crisis. Once again, a 58% loss (hit in December 2007) came well before the bottom, with around 68% more to go.

This time, growth stalled. Marvell's revenue in fiscal 2009 (ended Jan. 31, 2009) came to around $2.95 billion. Twelve years later, fiscal 2021's total was around $2.97 billion. Not surprisingly, the stock went more than 14 years without a new record, finally beating its 2006 close in June 2020.

The last two crashes ended fast

Marvell's two latest drops played out very differently. Shares fell around 62% between Dec. 7, 2021, and Jan. 5, 2023, and around 61% between Jan. 23 and April 21, 2025. Each time, a 58% loss was close to the low -- shares fell only about 9% more in the first case and basically not at all in the second.

Revenue wasn't perfect in those years. Marvell's revenue climbed 33% in fiscal 2023 (ended Jan. 28, 2023), then slid around 7% the next year. But fiscal 2026 (ended Jan. 31, 2026), which included the April 2025 low, saw 42% growth to a record $8.2 billion, fueled by what management called robust AI demand.

And the stock followed. It closed at new records in November 2024 and April 2026, around two years and one year after each 58% mark.

Is Marvell stock a buy after this drop?

I think today's business looks far more like 2025 than 2008. Marvell's revenue growth is accelerating, from 28% year over year in fiscal 2027's first quarter to 37% in the second (ended Aug. 1).

On Nov. 2, the company said third-quarter revenue is tracking with its forecast of around $3.15 billion, which would mean growth of about 52%.

The price looks nothing like 2000's, either. At around $141, Marvell shares cost about 19 times the adjusted earnings expected from its own business in fiscal 2028 (the year ending in January 2028). At the June record, that same earnings estimate would put the price-to-earnings ratio near 43. In other words, investors today pay less than half as much as they did in June for the same expected profits.

Notably, the fall has mostly erased this year's rally, not years of gains. Marvell stock began 2026 around $85, so it's still up over 50% in 2026.

In the end, Marvell's history suggests the depth of a drop matters less than what revenue does next, and Marvell's revenue growth keeps speeding up. I think the stock is worth buying here.

Of course, a 58% loss was far from the bottom in two of the four past crashes, and the same might happen this time. That's why I'd space my purchases out over time.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Lumentum and Marvell Technology. The Motley Fool has a disclosure policy.