MaxLinear (MXL) shares tumbled 6.96% in after-hours trading on Thursday, giving back a portion of the sharp gains accumulated in the sessions leading up to the company's second-quarter earnings release. The sell-off occurred despite results that topped Wall Street forecasts and an upbeat revenue outlook for the third quarter.

The post-market decline followed a powerful three-day rally, with the stock surging 7.95%, 5.43%, and 7.93% in the prior sessions as investor optimism around robust earnings expectations was fully priced in. With the earnings catalyst now realized and significant short-term profits on the table, concentrated selling pressure emerged as traders locked in gains.

Compounding the profit-taking, valuation concerns may have added to the downward momentum. Wall Street’s median 12-month price target for MaxLinear sat at $67, well below its recent closing price above $86, while the stock traded at a lofty 52 times forward earnings. The company reported second-quarter revenue of $168.85 million, beating the $164.7 million consensus estimate, and adjusted earnings per share of $0.35, above the $0.33 estimate. MaxLinear also guided for third-quarter revenue between $210 million and $220 million, far exceeding the Street’s $173.8 million view, driven by accelerating demand in its optical AI data center business.