Key Takeaways
- Marvell stock is up 185% in the past year. It was lifted by Nvidia CEO Jensen Huang’s trillion-dollar call, a chip deal with Alphabet’s Google and a fiscal 2031 revenue target of $70 billion to $90 billion.
- Worries about how AI spending gets paid for have left the stock about 26% below its June high, even as analysts raised their fiscal 2031 revenue estimates to about $74.5 billion.
- Marvell’s forward P/E has fallen from 48x in late September to about 43x, which is still above its five-year average of about 33x.
- The pullback looks like a buying chance for patient investors, and the fiscal third-quarter report in early December is the next test.
Marvell Technology (MRVL) has had the kind of year AI investors dream about. The stock is up 185% in the past year (through Wednesday’s close), lapping both Nvidia (NVDA), up 21.5%, and Alphabet (GOOG), up 28.8%, the two giants betting on it.
It’s also about 26% below its June high. So is it too late to buy?
Nvidia lit the fuse
The run started on March 31, when Nvidia invested $2 billion in Marvell alongside a partnership built around its NVLink Fusion platform.
On June 2, Nvidia CEO Jensen Huang joined Marvell CEO Matt Murphy on stage at Computex and called Marvell the “next trillion-dollar company.” The stock jumped 32.5%, its best day since 2000.
Marvell is worth about $215 billion today, so it would need to grow nearly fivefold to get there. (No pressure.)
TIKR tracks 46 analysts on Marvell. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Marvell, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Marvell’s Analyst Ratings
Google, then a plan the Street didn’t see coming
On Aug. 19, Marvell disclosed a deal giving Alphabet’s Google a warrant for up to about 59 million shares at $206.58 each. The deal covers custom chip programs that Morgan Stanley values at up to $120 billion of revenue through fiscal 2033.
A week later, Marvell reported record quarterly revenue of $2.739 billion, up 37%, and raised its outlook for fiscal 2027 and 2028. Murphy said AI bookings “remain exceptionally robust.”
Then, at its Oct. 6 Investor Day, Marvell targeted about $20 billion of revenue in fiscal 2028 and $70 billion to $90 billion in fiscal 2031. Analysts had expected about $47 billion for that year. CFO Dan Durn’s shorthand for fiscal 2031 earnings: “$30 in ’30.”
Analysts now see revenue of $19.7 billion in fiscal 2028 (the year ending January 2028) and $53.5 billion two years later, up from $8.2 billion in fiscal 2026.
For fiscal 2031, the consensus jumped to about $74.5 billion in October, from about $46.7 billion at the end of September.
Then the AI trade cracked
Marvell gave back 16.7% on June 5 as chip stocks sold off. By August it had fallen nearly 50% from its June high before rebounding.
October brought another scare. Marvell sank 8.7% on Oct. 14 after a hot inflation report revived fears about how AI spending gets funded. Two days later, it fell another 5.6% on Broadcom CEO Hock Tan’s warning that capital could limit AI growth.
Marvell’s plan already assumes growth in data center spending slows from roughly 70% now to about 20% by 2030. The bigger risk is concentration. Management says its four biggest US hyperscaler customers could deliver most of the plan on their own, and the market is now questioning how those same buyers will pay for AI.
Cheaper than it was in September
The selloff hit the stock while the estimates kept climbing. Marvell’s forward P/E has fallen to about 43x, from 48x in late September and nearly 70x in early June.
That’s still above its five-year average of about 33x, so investors are still paying up.
Analysts’ mean price target has climbed to about $342, from about $291 at the end of September.
That’s about 40% above Wednesday’s close.
My take: it isn’t too late. Marvell’s estimates have risen faster than its stock since September, and its plan leaves room for AI spending to cool. For anyone who can stomach 10% swings, this pullback looks like a buying chance.
The next test is the fiscal third-quarter report, due in early December. Marvell guided to revenue of $3.15 billion, plus or minus 5%, and a non-GAAP gross margin of 57.5% to 58.5% as custom chips ramp. A margin below that range would mean custom chips are hurting profits more than planned.
So what is Marvell stock actually worth?
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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 of the stocks mentioned. Thank you for reading, and happy investing!
