Marvell may see ‘material strength’ for next 2 years, amid AI spending boom: analysts

Marvell Technology (MRVL) may have reported in-line results and guidance, but it was the company’s forecast for the next two years that had Wall Street analysts optimistic.

Shares rose 9.5% in premarket trading on Wednesday, while Broadcom (AVGO), Nvidia (NVDA) and AMD (AMD) also moved higher.

“We believe that Marvell loses some of the primary ASIC revenue for Trainium 3, which has been a debate, but it doesn’t really matter now — there is enough XPU attach that the company’s Amazon (AMZN) business will grow in CY26, and the direct back end ASIC is actually the lowest gross margin product in the Amazon ecosystem, so we would gladly trade ASIC for ASIC attach,” Morgan Stanley analyst Joseph Moore wrote in a note to clients.

Moore, who has an Equal-Weight rating on Marvell, but upped his price target to $112 from $86, said the 20% growth rate for 2026 is “realistic” but the 100% growth rate in 2027 is an eye-opener.

“The 100% growth in CY27 is at least partly dependent on the next big ASIC program, and those programs tend to be difficult to predict; while we believe development is on track, this is Marvell’s first big project where they have done the heavy lifting on design,” Moore added. 

Jefferies analyst Blayne Curtis agreed with that sentiment and said the growth trajectory was “raised again” after the company’s AI day in September. 

“The confidence in the custom business continues to rise, pointing to 20% growth next year with a stronger 2H with PO for the year in hand,” Curtis wrote, adding that Microsoft’s (MSFT) Maia 300 chips are likely to be a “key driver” for Marvell’s revenue doubling in fiscal 2028. 

Aside from that, Marvell won another XPU program from an emerging hyperscaler, and the strength in the optical business is growing (now at 30% or more, compared to 18% growth previously). The company is also seeing strength in its communications, business, and the Celestial AI acquisition should help “plug” the clear co-packaged optics hole in its roadmap, Curtis added.

“Overall, much stronger and longer outlook than what was expected,” Curtis added. “There are definitely moving parts in F28, but the strong F27 outlook coupled with Amazon’s positive announcements at Re:Invent should help get the stock back on track.” He reiterated his Buy rating on Marvell and upped his price target to $120 from $80.

Needham analyst N. Quinn Bolton also upped his price target, moving to $120 from $90, as he was positive on the fact that Marvell does not expect any “air pockets” in custom silicon revenue next year.

“Through the expansion of its product portfolio targeting high margin, high growth cloud/5G/automotive infrastructure markets, Marvell now targets one of the highest long-term revenue growth rates among large capitalization companies in the semiconductor industry,” Bolton wrote. “The company’s AI solutions are ramping quickly and AI related investments are creating demand for the company’s traditional cloud product offerings.”