Marvell (MRVL) stock closed the May 13 trading session at $177.95. That means it has gained 135% since March 5, according to Yahoo Finance. Meanwhile, the SPDR S&P 500 index (SPY) is up close to 9% in the same period.
Why has Marvell outpaced the S&P 500 so much since that date? The company reported Q4 earnings on March 5. The report was strong, but it also showed that the rumors about the company losing its key customers were false.
The key driver of the stock for this fabless semiconductor giant is artificial intelligence. In Q4, 74% of the revenue came from data centers. The company’s vast product portfolio spans computing, including custom AI chips, optics, networking, storage, and security.
Marvell’s most important products are its custom AI accelerators, XPUs, and data center interconnect (DCI) modules.
Several major pieces of news have boosted the stock recently.
Key news for Marvell stock
On March 31, Nvidia and Marvell entered into a strategic partnership, and as part of the deal, Nvidia invested $2 billion in Marvell.
This partnership proved the importance of Marvell’s networking stack and the work the company is doing on silicon photonics.
On April 20, Amazon expanded its partnership with Anthropic. This deal involves Anthropic committing to spending more than $100 billion over the next 10 years on AWS technologies. A key part of this deal is Trainium chips, which Amazon designs in partnership with Marvell.
Marvell added roughly $5 billion to its market cap amid a rumored partnership with Google. The source of the rumor was The Information. Its rumors may not always be reliable, as was the case with a previous one that claimed Microsoft was considering leaving Marvell for Broadcom (AVGO).
Related: Goldman Sachs resets Broadcom stock forecast
It is very difficult to imagine this rumor being true, as Google recently expanded its partnership with Broadcom. This time, Google also decided to use Broadcom for its networking stack, unlike in the previous arrangement. This signals that the partnership between the two has never been stronger.
On April 22, Marvell confirmed the acquisition of Polariton Technologies, further strengthening its silicon photonics strategy.
Intel’s Q1 earnings, reported on April 23, boosted confidence in the semiconductor sector.
Marvell has set its Q1 fiscal year 2027 earnings report for May 27, and the expectations are high.
Shutterstock
Bank of America raises Marvell stock price target
In a research note shared with me, Bank of America analyst Vivek Arya and his team updated their opinion on Marvell stock ahead of earnings.
The team raised their 2030 AI data center systems total addressable market (TAM) outlook to approximately $1.7 trillion from $1.4 trillion.
The team believes that in 2027 and 2028, Ethernet Transceivers TAM will increase to $7 billion and $10 billion, respectively. This will be good for Marvell, as it supplies digital signal processors (DSPs) and Transimpedance amplifiers, as well as laser and modulator drivers.
More Tech Stocks:
- BofA resets Google stock price target after earnings smasher
- Bank of America resets Microsoft stock forecast after earnings
- Goldman Sachs resets Nvidia stock forecast ahead of earnings
Analysts said a $10 billion increase in the transceiver TAM in 2028 would translate into a $2 billion increase in the DSP TAM. They estimate that Marvell can maintain a 60% to 70% market share, potentially resulting in $1.2 billion or more in additional sales for Marvell DSPs.
The team raised its total fiscal year 2028 and 2029 sales estimates by 1% and 8%, respectively, to $15.17 billion and $20.02 billion. Analysts also raised their non-GAAP EPS estimates (excluding stock-based compensation) for the same periods by 3% and 15% to $5.60 and $7.80, respectively.
Arya reiterated a buy rating for Marvell stock and raised the price target to $200 from $125, based on a 30 multiple of his 2028 pro forma EPS estimate (including stock-based compensation).
Bank of America analysts noted downside risks for Marvell:
- Loss of visibility in key custom Application-specific integrated circuit (ASIC) projects
- Competition in AI compute
- Cyclical industry risks, including a potential slowdown in legacy storage,
enterprise networking, and carrier markets
Upside risks:
- Faster-than-anticipated ramp/visibility in major custom ASIC projects
- Continued growth in the DSP-based pluggable market versus new LPO/LRO techs
- Share gains in emerging AEC/CPO/scale-up switch markets against incumbents
Goldman Sachs raises Marvell stock price target
In a research note shared with me, Goldman Sachs analyst James Schneider and his team updated their view on Marvell stock ahead of earnings.
The team believes Marvell will increase its 2026 and 2027 revenue growth guidance, driven by strength in AI data center sales.
The team raised its fiscal 2027 and 2028 revenue estimates to $11.12 billion and $15.35 billion, respectively. They also raised EPS estimates for the same periods to $3.27 and $5.0, respectively.
Analysts noted that new estimates are approximately 3% and 5% above Wall Street consensus.
Analysts said items on the earnings call that could move the stock include:
- Upside to custom ASIC revenue from a potential partnership with Google
- Updated fiscal 2027 and 2028 guidance
- Near-term gross margin variability, which could be impactful.
Schneider reiterated a neutral rating for Marvell stock and increased the target price to $125 from $100, based on a 28X price-to-earnings multiple applied to his normalized EPS estimate of $4.50.
Goldman Sachs analysts noted downside risks for Marvell:
- Slowdown in overall AI spending
- Share loss in custom compute
Upside risks:
- Stronger-than-expected ramp in custom compute
- Stronger-than-expected recovery in traditional businesses
Related: Goldman Sachs resets Nvidia stock forecast ahead of earnings