Marvell Wins Wall Street. Google Bets $12 Billion. Amazon Fears Fade.

Marvell Technology (MRVL) keeps winning over the analysts. GF Securities reiterated its favorable view on the stock, naming it a top pick within its positive outlook on custom AI chips. Analyst Henry Huang said much of the growth he sees comes from Alphabet's (GOOG) (GOOGL) Google. He expects three of Marvell’s chip lines tied to Google to bring in around $3 billion each by 2028. Huang also sees Marvell playing a growing role in Amazon.com’s (AMZN) Trainium chips, worth roughly $1 billion this year and $2 billion next year. GF was not alone. Wells Fargo, Morgan Stanley, Susquehanna, and Rosenblatt Securities all raised their Marvell price targets within a day of each other. 

None of this comes out of nowhere. Just a few days back, Marvell signed a custom chip deal with Google that let the search giant take a potential $12 billion equity stake in the company. Huang expects that partnership to improve Marvell’s odds of winning even more of Google’s future chip work. 

The Amazon side of the note also matters more than you think. Marvell had lost the design work for Amazon’s next Trainium chips to a rival. It had been one of the main worries weighing on the stock, even as the rest of the business kept firing. GF’s numbers point the same way. Huang expects Marvell to keep contributing to Trainium 3 and sees its position on the following generation strengthening after the Celestial AI deal. Billions in expected Trainium revenue is not what losing the customer would look like. 

The Milestone That Changes Marvell’s Story

With the Google deal, Marvell now designs custom AI chips for all three of the largest U.S. cloud companies, Amazon, Microsoft (MSFT), and Google. No other chip designer can claim that. For years, Marvell was seen as the clear number two to Broadcom in this space. Landing all three hyperscalers could change that story. 

The Google partnership might be the most reassuring deal for investors. Google agreed to buy Marvell shares tied to the amount it purchases through 2033, going well beyond an ordinary supply deal. A customer taking an equity stake to lock in a supplier says a lot about Marvell's importance to its plans. 

For a stock that fell on price rather than fundamentals, this is exactly the kind of validation that rebuilds the case. 

About Marvell Technology Stock

Marvell develops semiconductor solutions for data infrastructure, and its products are mainly used in data centers, cloud computing, artificial intelligence, telecommunications networks, and enterprise storage systems. Marvell’s solutions enable high-speed data transfer inside data centers and communication networks, making them critical for AI workloads, cloud services, and internet infrastructure. The company serves customers worldwide through direct sales and distributors. Founded in 1995, the company is headquartered in Wilmington, Delaware. 

Over the last 12 months, Marvell has significantly outperformed the semiconductor sector, with the stock climbing 180.5%. This was well above the iShares Semiconductor ETF (SOXX), which gained 101.4% during the same period. The trend has continued this year as well, with the stock up 154.9%, outperforming the sector’s gain of 68.9%. 

Marvell’s valuation leaves little doubt about the growth investors expect. The forward GAAP price-to-earnings ratio of 127.68 times looks extreme, though there is no 5-year average to compare it to since the company only recently became consistently profitable. The forward price-to-sales ratio of 18.29 times sits 81.3% above the 5-year average of 10.09 times, a steep premium to its own history. The EPS outlook helps justify investors' willingness to pay up for the stock. Analysts expect growth of 43% in 2027, 55% in 2028, 51% in 2029, and 46% in 2030. That is strong, consistent growth, especially for a company of this scale. 

The balance sheet is solid. Marvell holds $3.84 billion in cash against $5.28 billion in debt. A net debt under $1.5 billion seems easily manageable for a company worth over $211 billion. For investors, the premium reflects how crucial Marvell has become to the AI buildout, and the growth trajectory is what keeps that price from looking unreasonable. 

Marvell Sees Accelerating Growth as Data Center Business Expands

Marvell reported second-quarter fiscal 2027 earnings on Aug. 27. The company posted record revenue of $2.74 billion, up 37% year-over-year (YOY). The earnings per share came in at $0.94, slightly beating the Wall Street consensus of $0.93. Non-GAAP gross margin was 58.9% while GAAP gross margin was 53.1%. Demand across the company’s data center business continued to accelerate, driven by AI infrastructure spending, optical networking and custom silicon. Marvell’s data center segment revenue was $2.17 billion, larger than many chipmakers’ total quarterly revenue. However, management said, the strength was not limited to one product line. Optical DSPs, scale-out switching, broadband analog, CXL memory expansion and custom silicon all contributed to the company’s momentum and supported its stronger outlook. 

Looking forward, Marvell expects revenue of $3.15 billion and non-GAAP earnings per share of $1.05 to $1.15 for the third quarter of fiscal 2027. Non-GAAP gross margin is expected to be between 57.5% and 58.5%. The company expects non-GAAP operating expenses for the third quarter to be about $655 million. For the full year 2027, Marvell now expects revenue of about $12 billion, up from a prior outlook of about $11.5 billion. It also raised its fiscal 2028 revenue outlook to about $18 billion. The company said data center revenue should grow about 60% in fiscal 2027 and more than 60% in fiscal 2028. 

What Do Analysts Expect For MRVL Stock?

Following the company’s quarterly results, Goldman Sachs reiterated a “Neutral” rating on the stock and assigned a price target of $195. The firm believes the stock may trade within a limited range in the near term as the results were in line with expectations. 

Goldman Sachs noted that investors were already expecting strong results due to positive updates from industry peers. Therefore, the firm believes the stronger guidance may already be reflected in the stock price. In addition, TD Cowen analyst Sean O’Loughlin also maintained a “Hold” rating with a price target of $245. In contrast, Oppenheimer analyst Rick Schafer reaffirmed a “Buy” rating on MRVL and set a price target of $325. 

Based on 36 Wall Street analysts covering the stock, MRVL holds a consensus “Strong Bu”y rating. Out of those, 26 have a “Strong Buy” rating, three have a “Moderate Buy” rating, and seven have a “Hold” rating. The stock’s median price target of $279 reflects 28.8% upside from current levels. The high price target of $400 implies an additional 84.7% upside from the current share price.