Marvell’s custom silicon business is growing among major hyperscalers just as the Wall Street consensus is starting to feel like it’s missing something important. Here’s what the numbers reveal about where this smaller chip stock could be heading.
Wall St.’s 24/7 price target for Marvell Technology (NASDAQ: MRVL | MRVL Price Prediction) is $284.80 over the next 12 months. With shares at $248.71, that means an upside of 14.5%. The stock gets a Buy rating from our model with a 90% confidence level, putting it within our high conviction level.
Wall Street 24/7 Price Target Summary
| Metric | Value |
|---|---|
| Current price | $248.71 |
| 24/7 Wall St price target. | $284.80 |
| Up/Down | 14.5% |
| Recommendation | BUY |
| Confidence level | 90% |
Marvell is a fraction of the size of Broadcom (NASDAQ: AVGO), but its data center business continues to grow fast enough that management has had to raise its targets again. Its custom silicon ramp is only starting to show up in reported revenue.
A 193% rally and pullback that resets valuation
Marvell shares are up 193.16% year to date and 3.45% over the past week, but they are down 5.03% over the past month. The stock is trading about 24.6% below its 52-week high of $329.73 and well above its low of $70.62.
In August, Marvell reported record revenue of $2.739 billion. This represents an increase of 37% from the previous year and above the consensus figure of $2.7068 billion. Non-GAAP EPS of $0.94 beat the estimate of $0.9289, the fourth consecutive quarter. Data center revenue increased 46% to $2.17 billion and now accounts for 79% of sales.
For the fiscal third quarter, management expects revenue of $3.150 billion, plus or minus 5%. Marvell also expanded its custom silicon partnership with Alphabet (NASDAQ: GOOGL) unit Google.
The deal includes a mandate that allows Google to acquire up to 7% of Marvell’s stock if revenue targets are met. Marvell’s October Investor Day presentation noted that its custom silicon is now shipping to the four major hyperscalers.
Why Bulls See $350 or More
The bull’s price is $352.54, approximately 41.7% above today’s price. Management expects fiscal 2028 revenue to grow approximately 50% and custom revenue to more than double. For fiscal 2029 custom revenue, Marvell’s CEO reiterated a target of “$10 billion and counting” and said “all of our projections to date have been underestimated.”
Management also expects non-GAAP operating margin to reach its target range of 38% to 40% in the fiscal fourth quarter. Analysts are very positive, with 8 strong buy ratings, 32 buys, 6 holds, and no sells. Their consensus target means an increase of 37.3%.
Risks that could limit the increase
The bearish scenario stands at $218.43, approximately 12.2% below current levels. Customer concentration poses the biggest risk, as hyperscalers could bring chip design in-house. The growing share of custom chips is also putting pressure on margins.
Non-GAAP gross margin for the fiscal third quarter is expected to be between 57.5% and 58.5%, up from 58.9%. Stock-based compensation reached $207.6 million in the fiscal first quarter, up from $142.1 million a year earlier. Stocks can also fluctuate wildly: they went from $278.67 in mid-June to $188.30 a month later.
The bulls would say the margin decline comes from a custom ramp that adds significantly more revenue. The balance sheet also looks strong, with net debt to EBITDA of 0.27x and $3.93 billion in cash.
Marvell is between Broadcom and AMD on valuation
Broadcom competes directly with Marvell for hyperscalers’ accelerator and custom networking businesses. The stock changes hands at 18 times forward earnings, even though revenue rose 85.5% last quarter, helped by $16.70 billion in revenue in AI semiconductors.
By this measure, Marvell’s 31x multiple looks expensive. Marvell’s smaller revenue base means that each new custom win further scales its results.
Advanced microdevices (NASDAQ:AMD) gives a large-scale comparison of AI accelerators. AMD is trading at 34 times forward earnings after its data center revenue rose 107% to $6.718 billion. This makes Marvell a bit cheaper in comparison.
| Business | Forward P/E | Quarterly revenue growth (year-over-year) |
|---|---|---|
| Wonderful | 31x | 36.5% |
| Broadcom | 18x | 85.5% |
| AMD | 34x | 50.1% |
Marvell’s valuation sits between that of its two largest AI peers. This makes Wall Street’s 24/7 price target reasonable.
Personalized Silicon Visibility Tips the Scales
The Wall St. 24/7 price target of $284.80 comes with a Buy rating and 90% confidence level. The deciding factor is visibility. Management raised its outlook for fiscal 2027 and 2028, and custom revenue is expected to accelerate in the second half.
The arguments strengthen if third-quarter results come close to the forecast of $3.150 billion and if gross margin remains within the forecast range. This becomes lighter if a major hyperscaler moves its programs in-house. Overall, Marvell’s growth outweighs its volatility.
Our model projects where Marvell could trade if current trends continue.
| Year | 24/7 Wall St price target. |
|---|---|
| 2026 | $260.34 |
| 2027 | $284.80 |
| 2028 | $313.09 |
| 2029 | $334.42 |
| 2030 | $376.39 |
The projections are based on Marvell continuing its custom silicon and optics strategy. Faster adoption by hyperscalers of scaling optics could lead to higher results. The loss of a major customer could cause them to decline.
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