Semiconductors · #46 in the Retail 100

Marvell Technology

MRVL

Paying for the AI build-out↓The AI spending bet↑China's cheap AI models↓

Our rating: buymedium conviction
12-month target: $235.87 +37.6%
Expected vs. S&P 500: +19.2 ptsSee the math
Next earnings: Dec 1In 26 daysEarnings calls page ↗

Marvell lifted its fiscal 2028 sales target to about $20B in October, a goal that rests on custom AI chips for a few cloud giants.

Summary

Marvell designs chips for AI data centers: custom processors for cloud companies such as Amazon and Google, plus optical and networking chips that move data between machines. Data center chips are now most of its revenue and growing fast. The rest, chips for networks, consumer devices and industry, is a smaller and slower business. The stock depends on Marvell hitting a target that assumes data center sales keep surging through January 2028, and on keeping its biggest cloud customers.

$171.92

+$81.55 (+90.24%)Past year

What Marvell Technology does

Marvell designs chips for cloud data centers, including custom AI processors built for a single customer and optical chips that move data between servers. Ten customers made up 82% of fiscal 2026 sales.^8,9,24

What it sells

Data center chips79% of revenue, Q2 FY2027
Custom AI chips designed with cloud companies, plus the optical, switching and storage chips that connect and feed them.
Network and other chips21% of revenue, Q2 FY2027
Chips for corporate networks, phone-carrier equipment, consumer devices and factories. Marvell sold its car networking unit in 2025.

Who buys it

Cloud companies, served directly and through distributors. Last quarter one direct customer bought 16% of sales and one distributor 44%. Google signed an expanded custom chip agreement in July 2026. Winning or losing a single design can swing Marvell's sales.

Where you've seen it

Every current hard drive maker uses Marvell controller chips, so many store-bought hard drives run on one.

The backstory

In late 2025 investors feared Marvell was losing its two largest custom chip customers. A Benchmark analyst said Amazon had moved its next Trainium chips to Alchip, and The Information reported Microsoft was talking to Broadcom. The stock fell to about $84, though CEO Matt Murphy said he held orders for his lead customer's next chip. Since then Marvell has set a much higher revenue target and expanded its Google work.

How the business makes money

Why Marvell gets paid only when custom chips ship^{1,2,5,8,9,10,11,13,24,25}

Step 1
Cloud companies like Amazon and Google hire Marvell to design AI chips they can't buy off the shelf.
Step 2
Revenue comes only when those chips ship in volume. Marvell expects custom chip sales to speed up in the second half of fiscal 2027.
Step 3
Every AI cluster also needs optical chips to move data between machines. Those earn more per sale than custom chips, so Marvell sells both.
Step 4
Revenue grows faster than running costs. Management aims to keep 38¢ to 40¢ of each $1 of sales as profit after running the business.
What shareholders get
Cash also buys new technology, like Celestial AI for about $1.3 billion. The stock is betting data center sales keep surging through January 2028.

Advantages

Custom chips for the biggest clouds

Strong advantage

Strong, but concentrated in a few customers. Analysts say Marvell designs Amazon's Trainium chips, and Google signed an expanded deal in July.^11,24,25

Optical chips inside AI clusters

Strong advantage

Just as important. Marvell sells the signal-processing chips inside optical links between AI servers, and management has raised its outlook for optics linking chips within a rack, where it expects to be a leading supplier.^1,2

Partners that are also investors

Supporting

Helpful, but not a lasting edge on its own. NVIDIA bought $2 billion of Marvell preferred stock in March 2026, linking Marvell's custom chips to NVIDIA systems, and Google holds warrants.^9,24

What's changing

Customer doubts have given way to rising targets

Since March, Marvell has gone from defending its customers to raising its outlook. It now expects about $12 billion of revenue in fiscal 2027. The next test is Investor Day on October 6, 2026, where management has promised a revenue outlook to the end of the decade, including the Google deal.^{1,2,10,13,18,24}

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with Marvell Technology
Marvell Technologythis stock	$150.76B	Marvell designs chips for cloud data centers, including custom AI processors built for a single customer and optical chips that move data between servers. Ten customers made up 82% of fiscal 2026 sales.
BroadcomAVGO	$1.57T	Largest designer of custom AI chips for big tech, plus networking chips and software.	Broadcom sells far more AI chips; Marvell is smaller, growing across three clouds.¹⁶
Alchip Technologies (Taiwan-listed)private	—	Taiwanese chip design firm, reported to have won Amazon's next Trainium chips.	Reportedly took Amazon work; Marvell says it keeps its lead customer's next-chip orders.¹¹
Astera LabsALAB	$45.04B	Makes connectivity chips that move data inside AI servers.	Astera only does connectivity, growing faster; Marvell also designs custom AI processors.¹⁷
Credo TechnologyCRDO	$28.41B	Makes active copper cables and optical chips that link AI servers together.	Credo competes in connectivity only; Marvell also designs custom processors.

Leadership

Who runs the company, and how the stock has done under the CEO.

MRVL +147.5%S&P 500 +61.8%Price change since Nov 2021, the earliest data available · log scale

20222023202420252026

Matt MurphyChairman and CEO10 yrs, since 2016

Dan DurnCFO4 mo

Chris KoopmansPresident and COO1.2 yrs

Sandeep BharathiPresident, Data Center Group1.2 yrs

Wall Street on Murphy: PositiveTD Cowen upgraded the stock to Buy after the October investor day, saying the risks in its custom-chip business have mostly faded. Jefferies called Marvell's goal of $30 profit per share in fiscal 2030 conservative.^L6,L7

Leadership sources (7) · researched Oct 2026

L1Marvell Technology Group Ltd. Announces Appointment of Matthew J. Murphy as President and Chief Executive Officer · Marvell Technology, 2016-06-20
L2Marvell Technology names Maxim veteran Matthew Murphy as CEO · Reuters / Fortune, 2016-06-20
L3Marvell Announces CFO Transition · Marvell Technology / Business Wire, 2026-06-11
L4Marvell Technology, Inc. Form 8-K: promotion of Chris Koopmans and Sandeep Bharathi · Marvell Technology Investor Relations, 2025-07-17
L5Marvell Technology (MRVL) Transcript: Investor Day 2026 · Stock Analysis, 2026-10-06
L6Analysts upgrade Marvell, lift price targets after AI-focused analyst day · Investing.com / Yahoo Finance, 2026-10-07
L7Marvell Stock Just Got a Stunning Price Target Hike on the AI Boom · GuruFocus / Yahoo Finance, 2026-10-08

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Will Marvell's fiscal 2028 revenue beat its own $18 billion target? At about 46 times expected earnings, against a five-year median near 31, the stock needs it to.^{1,2,3,5,9,10,11,13,14,19,24,25}

Bull case: why buyers buy

Custom chips for Amazon and Google grow faster than planned and optical sales speed up, so revenue beats $18 billion and earnings grow fast enough to justify today's price.

Google has reasons to keep buying. Its warrant for Marvell shares vests with each $500 million of custom chips it buys. Management expects the bigger effect from fiscal 2029.
Analysts keep raising forecasts. They lifted fiscal 2028 earnings estimates to $6.75 a share over the past three months, with only one cut last month.
Profit should grow faster than sales. Management expects operating margin to reach its 38% to 40% target by the quarter ending January 2027.

Bear case: why sellers sell

If revenue tops out near $18 billion or a big cloud customer moves work to Broadcom or Alchip, a stock at 46 times expected earnings has far to fall.

The rest of the business is shrinking. Marvell expects non-data-center sales to fall by a low-to-mid-teens percentage this quarter.
Sales depend on a few buyers. One direct customer was 16% of last quarter's revenue. One distributor handled 44%.
Growth in custom chips squeezes margins. Marvell expects gross margin to slip this quarter as lower-margin custom chips grow.
Losing a big cloud customer is still a live risk. Marvell disputes reports from late 2025 that Amazon and Microsoft were moving work to rivals.

Where Delphi landsbuyWe think the bull case is more likely than today's price assumes.See why

What to watch

The numbers that will settle the debate.

Data center revenue▲ improving

$2.17B last quarter, up 46% from a year earlier and 79% of revenue. More than 20% growth expected this quarter.^1,2

Custom and optical chips, which must grow roughly 60% to reach $18 billion in fiscal 2028 if other sales hold.

Communications and other revenue▼ worsening

$568M last quarter, up 10% from a year earlier but down 3% from the quarter before.^1,2

Networking, carrier, consumer and industrial chips, which make up 21% of revenue and grow more slowly.

Adjusted gross margin▼ worsening

58.9% last quarter, with 57.5% to 58.5% expected this quarter.^1,2

Shows whether lower-margin custom chips squeeze profit as they grow.

Next earnings report

Dec 1

In 26 days

Earnings calls page ↗

Expected earnings per share: $1.04
Expected revenue: —

What to listen for: Whether data center revenue grows more than 20% from last quarter, as Marvell forecast, and whether the fiscal 2028 target rises again after Investor Day.^19,23

What would prove this wrong

✕Investor Day cuts, or fails to raise, the $18 billion fiscal 2028 target.
✕A big cloud customer moves its next custom chip to Broadcom or Alchip.
✕Adjusted gross margin falls below 57% as custom chips ramp.
✕Cloud companies cut AI data center spending in 2027.

Our ratingBuyMedium convictionas of Nov 2 close, $171.41 · what ratings mean

Changed from Hold to Buy as the price moved to $171.41. At this price the expected total return is +37.7%, ahead of the S&P 500 by 19.2 points.

12-month target: $235.87 (+37.6%)
S&P 500, same method, with dividends: +18.5%
Expected vs the market: +19.2 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $171.41

Target $235.87

bull case30% likely

$296.43 +73%

Google, Amazon and Microsoft chips all ramp up and optics speed up, so fiscal 2028 revenue clearly beats $18 billion and fiscal 2029 earnings land near the top of estimates.

$10.09 earnings per share × 29.4 = $296.43

base case50% likely

$223.02 +30%

Marvell meets its $18 billion target and operating margin reaches 38% to 40%, so earnings grow in line with analyst estimates.

$9.02 earnings per share × 24.7 = $223.02

bear case20% likely

$177.15 +3%

Revenue lands near $18 billion, but custom chips squeeze margin or a cloud customer shifts work elsewhere, leaving earnings in the lower half of estimates.

$8.59 earnings per share × 20.6 = $177.15

Why these odds: Analysts raised fiscal 2028 estimates from $6.18 to $6.75 in 90 days, with 35 raises and one cut last month. Earnings beats are small, 1% to 3%, but guidance topped consensus.

How the prices are built: Wall Street expects earnings per share of $9.02 for the year starting a year from now (analysts range from $8.15 to $11.15). Today the stock trades at 29.1 times next year's earnings per share; its five-year middle is 31.2. Because earnings per share is forecast to grow fast, valuations are cut 16%, since fast growth rarely keeps its price.^{1,9,19,20,21,22,26}

What tests the call: Marvell Investor Day, with detail on the Google deal and long-term targets (Oct 6)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 5; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $171.41, investors pay 56% more than they pay for the average stock's earnings

Marvell Technology trades at 29 times the earnings analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's earnings. That is below its five-year middle of 31.

Analysts expect earnings to grow about 53% the year after, against about 16% for the S&P 500. The S&P 500 trades at 19 times. The premium is a bet that Marvell Technology's earnings keep growing faster than the market's for years, not just next year.

Marvell Technology multiple: 29×
S&P 500 multiple: 19×
Base case: +30%
Bear case: +3%

Last earnings

FQ2 2027 results, reported Aug 27

Record revenue of $2.74B, a fiscal Q3 forecast of $3.15B against $3.03B expected, and higher fiscal 2027 and 2028 revenue targets.^1,2,3,4

Reported Aug 27	Expected	Actual	Difference
Earnings per share	$0.87	$0.94	+8.0%
Revenue	—	—	—

Beat expectations in 6 of the last 6 quarters

Stock reaction: -10.3% next day (closed at $216.62)

Why the stock moved

Down: reporters said the raised $18 billion fiscal 2028 target fell short of what some investors had hoped for.
Down: management gave little detail on what the Google deal adds, saving it for Investor Day.
Down: even after the drop the stock traded at about 53 times expected earnings, according to The Motley Fool.
Offset: fiscal Q3 revenue guidance beat estimates by about 4%.

What it means for the stock: Strengthened the growth story but sharpened the valuation question: targets rose, yet investors want Investor Day to show how much Google adds from fiscal 2029, when management expects most impact.