Marvell Stock Has Been Cut in Half. Its Biggest Fear May No Longer Be Valid.

Marvell Technology (MRVL) has taken a beating this past month, with MRVL stock nearly halving from its 52-week high this week. Part of the move is due to a broad selloff across chip stocks as investors grow nervous about AI spending. Joining the S&P 500 ($SPX) on June 22 gave MRVL stock a lift, but once the index-driven buying finished, it faded just as fast. Then, on July 15, Erste Group downgraded Marvell stock to a “Hold” rating, warning that the name had run too far ahead of itself. None of the fall was about the business. Even Erste Group called the guidance strong. The fall in MRVL stock was about price, not performance.

However, there is one company-specific worry that has hung over Marvell for months, although it has been quietly fading. That worry is Amazon (AMZN). Back in December, Benchmark analyst Cody Acree claimed Marvell had lost the design work for Amazon’s next Trainium AI chips to a Taiwanese rival. With Amazon being one of Marvell’s largest custom-chip customers, investors worried that this would be a serious blow to the company. But the claim was disputed from the start. JPMorgan pushed back at the time, and the evidence since has also pointed the other way.

Marvell and Amazon have a signed five-year agreement covering custom AI chips and related silicon. Just weeks ago, KeyBanc raised its price target on Marvell to $400, pointing specifically to the ramp of Amazon’s Trainium 3 and a likely new design win with Alphabet (GOOGL). Amazon is also opening up Trainium to outside customers, which only widens the market for the chips Marvell helps build. Marvell CEO Matt Murphy has also denied losing any business, and the recent developments back him up.

The rest of the picture is just as strong. Marvell's biggest partner, Nvidia (NVDA), has gone as far as calling Marvell a potential trillion-dollar company. The business itself keeps hitting records, and management has raised its outlook on the back of heavy AI demand. None of that looks like a company in trouble. Instead, Marvell looks like a leader whose stock fell because it had run up too far, too fast — not because anything underneath it broke. 

About Marvell Stock 

Marvell is a semiconductor company that provides data infrastructure solutions used in data centers, networking systems, and communication equipment worldwide. The company designs advanced chips that move, process, and store data efficiently. It offers a portfolio of Ethernet solutions, networking controllers, processors, storage controllers, optical and interconnect solutions, and custom chips. Marvell focuses on technologies that improve high-speed data transfer, connectivity, and AI infrastructure performance. The company is headquartered in Wilmington, Delaware and was founded in 1995. 

Over the last 12 months, Marvell has outperformed the semiconductor sector, with the stock climbing roughly 136%. This is well above the iShares Semiconductor ETF (SOXX), which has gained about 107% during the same period.

Marvell’s valuation is not cheap, and the recent fall has not changed that. The forward price-to-earnings (P/E) ratio of 56.8 times looks high. The number, however, is inflated by heavy stock-based pay and acquisition costs that are holding reported earnings down. Meanwhile, the price-to-sales (P/S) ratio of 17.4 times is a more useful number, sitting above the company’s five-year average of roughly 10 times. Even after falling roughly 42% from its 52-week high, Marvell stock still trades at a considerable premium to its historical average.

What supports the premium is the growth ahead. Analysts expect earnings growth of 42% in fiscal 2027 followed by growth of 66% in fiscal 2028, which helps explain why the stock trades at such a high multiple. The balance sheet is steady as well. Marvell holds $3.84 billion in cash against $5.28 billion in debt. The slight net debt seems easily manageable for a company worth roughly $160 billion.

Overall, even after the selloff, MRVL stock looks expensive. For investors, the question is whether the healthy and consistent growth outlook does enough to justify the premium.

AI Demand Fuels Higher Outlook 

Marvell Technology reported its first-quarter fiscal 2026 earnings on May 27. The company reported record revenue of $2.42 billion, a 28% year-over-year (YOY) increase. Data-center revenue represented 76% of total revenue. Non-GAAP EPS came in at $0.80, which beat the estimate of $0.79. The company’s GAAP gross margin was 52.1%. Management said that cash flow from operations was a record $639 million and the company repurchased $200 million of its stock. 

Looking ahead, Marvell expects total revenue to grow 12% sequentially and 35% YOY at the midpoint to $2.7 billion for Q2 2026. Non-GAAP EPS is expected to be $0.93. The company also expects continued growth in its data-center segment alongside the custom silicon business significantly contributing to future revenue growth. On the Q1 earnings call, CEO Matt Murphy reaffirmed that Marvell’s custom AI chip business remains on track to reach $10 billion in revenue by fiscal 2029, saying the company has a clear path to achieve that goal.

What Do Analysts Expect for Marvell Stock?

Analysts remain divided on Marvell’s future outlook. Morgan Stanley reiterated a “Hold” rating on MRVL stock with a price target of $195. However, analysts believe Google’s next-generation custom AI chip, Frozen v2, could create an opportunity for Marvell if the company is chosen as a development partner. The SRAM-based inference-focused architecture is expected to begin limited production in 2027, which could support Marvell’s growing silicon business. In contrast to Morgan Stanley, KeyBanc analyst John Vinh maintained a “Buy” rating on MRVL stock and assigned a target price of $400. 

Marvell stock holds a consensus “Strong Buy” rating from 35 Wall Street analysts. The mean target price of $263.06 implies potential upside of 36% from current levels. In addition, the highest price target of $400 reflects impressive potential upside of 107% from here.