Key Stats for MRVL Stock
- Past week performance: -5.5%
- 52-week range: $61.44 to $329.88
- Valuation model target price: $394
- Implied upside: 82% over 2.4 years
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A Beat and a Raise That the Market Still Sold
Marvell (MRVL) fell about 5.5% this week even after the chip designer beat Q2 estimates and raised guidance twice in the same release. Investors liked the numbers but worried about when the biggest growth driver actually shows up in revenue.
Q2 revenue climbed 37% year over year to $2.74 billion, and non-GAAP EPS reached $0.94, both ahead of estimates. Data center revenue, now 79% of Marvell’s total business, surged 46% year over year to $2.17 billion. Management raised full-year fiscal 2027 revenue guidance to roughly $12 billion. That figure represents a 45% increase from last year’s revenue level. Fiscal 2028 guidance also rose to about $18 billion. The prior forecast stood at sixteen point five billion dollars just one quarter earlier.
The bigger story is Marvell’s expanded commercial agreement with Google, tied to its TPU ecosystem. The deal spans custom accelerators, storage controllers, network interface chips, and memory interface silicon. It carries potential cumulative revenue of one hundred twenty billion dollars through fiscal 2033. As part of the deal, Google received warrants for up to about 7% of Marvell’s shares. Those warrants vest as the company hits purchase milestones outlined in the agreement.
CEO Matt Murphy called the arrangement significant on the earnings call. He said this engagement and warrant are significant when describing the scale of the opportunity. He also confirmed that meaningful revenue from the deal likely starts in fiscal 2029. That timing explains why shares fell even as guidance rose on the news. If MRVL stock can hold its current level while the market waits for that ramp, the setup could look very different by 2029.
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Is Marvell Stock Undervalued After the Selloff?
Under valuation model assumptions realized through 1/31/29, the stock is modeled using:
- Revenue Growth (CAGR): 42.0%
- Operating Margins: 35.0%
- Exit P/E Multiple: 34.9x
Based on these inputs, the model estimates a target price of $394, implying an 82% total return from the current share price and an annualized return of 28% over the next 2.4 years.
That annualized figure sits well above the 15% threshold many investors use to call a stock genuinely undervalued, reflecting just how far Marvell has pulled back relative to its growth trajectory. The stock now trades at an NTM P/E of about 40x, which looks reasonable next to a forward two-year revenue CAGR of 49.2%.
Margins are expanding too, since non-GAAP operating margin grew 180 basis points year over year to 36.6%, with management targeting a 38% to 40% range by Q4. Data center growth alone is expected to top 60% in both fiscal 2027 and fiscal 2028, driven by custom silicon, connectivity, and scale-up optics.
The gap between today’s price and the model’s target largely reflects investor patience, or the lack of it, around the Google deal’s slow ramp. Compared with its own recent history, Marvell’s current multiple looks cheap relative to its growth outlook.
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Marvell Versus the Chip Giants: Broadcom and Nvidia
Marvell’s story increasingly mirrors Broadcom’s (AVGO) custom silicon playbook, and the comparison matters for valuation. Broadcom trades at a forward P/E near 35x with revenue growth around 20% to 22%, powered largely by its own custom AI chip relationships with hyperscalers. Marvell’s forward two-year revenue CAGR of 49.2% runs well ahead of that pace, yet its NTM P/E of roughly 40x sits close to Broadcom’s multiple.
Nvidia (NVDA) remains the sector’s growth benchmark, trading at a forward P/E near 40x with revenue growth above 50%. Marvell doesn’t compete directly with Nvidia’s GPUs, but it competes for the same AI infrastructure spending through custom accelerators that sit alongside or replace merchant silicon in some workloads.
Marvell’s moat is its position as a second source for custom AI silicon, which hyperscalers like Google want as they diversify away from any single chip supplier. That positioning is what makes the $120 billion Google agreement so significant, even though the timeline stretches years into the future.
What’s Driving MRVL Stock Going Forward?
The clearest near-term catalyst is Marvell’s Investor Day on October 6, where management plans to give a detailed revenue roadmap through the end of the decade. That event should clarify how much of the $120 billion Google opportunity gets reflected in near-term targets.
Custom silicon acceleration is the second driver to watch. Murphy set a specific benchmark, telling analysts the Custom business should visibly inflect in the second half of fiscal 2027, a timeline investors will hold him to on the next call.
Scale-up optics, including next-generation networking components, are also gaining momentum, with fiscal 2028 guidance for that segment increased meaningfully this quarter. New CFO Dan Durn’s focus on operating leverage and cash flow should support margin expansion alongside the custom silicon ramp.
Gross margin will compress slightly in Q3, guided to 57.5% to 58.5%, as the Custom business ramps and shifts product mix. That’s a normal trade-off for faster growth, not a sign of weakening fundamentals.
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Should You Invest in Marvell?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
