Marvell: AI Investor Day Adds to Our Confidence and Leads Our Valuation Higher

We raise our fair value estimate for shares of narrow-moat Marvell Technology to $65, from $61, after the firm provided artificial intelligence, or AI, targets ahead of our expectations and announced a new custom accelerator customer. We have raised our longer-term forecast for Marvell's data center revenue as a result. We retain our confidence in the firm's strategy for supporting generative AI networks. We see networking companies like Marvell as key beneficiaries of generative AI spending, especially with exposure to custom accelerator projects outside of traditional networking. Marvell's portfolio, centered around data center infrastructure, aligns well to continue reaping the rewards of generative AI investment, in our view. Shares dipped about 2% following the investor event, which to us shows that the market has already baked in aggressive AI growth. We see the stock as fairly valued.