Marvell's stock has soared ahead of earnings. Why analysts say it's still 'underestimated.'

By Britney Nguyen

Leadership in optical connectivity and the ramp up of custom chips should help Marvell deliver a strong earnings report, analysts say

Marvell reports April-quarter earnings results after the bell on Wednesday.

Marvell Technology's stock has soared this year on enthusiasm for optical connectivity and custom chips, and some analysts on Wall Street are expecting that momentum to drive a strong fiscal first-quarter earnings beat on Wednesday.

The chip maker's stock (MRVL) "has been a 'battleground' thesis/stock over the past year, with much noise on competition" within the markets for application-specific integrated circuits and optical connectivity, J.P. Morgan analyst Harlan Sur said.

Marvell's stock has soared 142.3% so far in 2026, including a 66.1% run-up in April, which was the best monthly performance since October 2001. Sur touted that his strong conviction in the company's ability to score custom chip design wins is playing out.

Sur said he sees more upside for the stock given that Marvell's pipeline for its XPUs, XPU attach and networking offerings improved in the latest quarter. Marvell refers to its custom chips as XPUs, and to the supporting chips as attach.

When Marvell reports earnings for the quarter through April after the market close on Wednesday, Sur expects the results to reflect strong demand for its optical digital signal processors, or DSPs, driven by the ramp-up of custom chips and graphics processing units later this year. These specialized chips convert electrical data into optical signals and are important for high-bandwidth, low-latency data transmission.

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Despite the recent stock momentum, HSBC analyst Frank Lee said he thinks Marvell's revenue growth opportunity from optical connectivity "is still being underestimated by the market."

Marvell's stock slipped 1.1% in recent morning trading Wednesday, but that was after it posted four straight record closes.

The company is "a key beneficiary of optical transceivers' multi-year supercycle," Lee said in a Tuesday note, pointing to a shift toward optical interconnects as traditional copper-based wiring reaches limits in artificial-intelligence data centers. Marvell is in a dominant position with its 800G and 1.6T DSPs, Lee said.

Lee also said Marvell will benefit from memory chip shortages, which, he said, could drive demand for compute express link, or CXL, which is an interconnect technology for high-speed, low-latency communication between central processing units and memory components.

The momentum for optical interconnects should last through the rest of the year, RBC Capital Markets analyst Srini Pajjuri said in a note earlier this month, and Nvidia's (NVDA) $2 billion investment in Marvell and the partnership to develop AI infrastructure is "a validation of [Marvell's] optical connectivity leadership."

In the current quarter, J.P. Morgan's Sur said Marvell is likely ramping up production of Amazon.com's (AMZN) next-generation Trainium 3 chip and other XPU attach projects, while its program with Microsoft (MSFT) for the tech giant's next-generation Maia 3 "is progressing well and on track to ramp towards the back half of this year," and orders look to be improving for 2027.

Marvell is expected to report revenue that grows 26.9% from a year ago to $2.4 billion for its fiscal first quarter, and adjusted earnings per share that will rise to 80 cents from 62 cents, according to the average analyst estimates compiled by FactSet. Its data-center business is expected to grow 26% to $1.8 billion in revenue in the April quarter.

For the July quarter, analysts tracked by FactSet are looking for revenue of $2.6 billion and adjusted earnings of 90 cents per share.

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-Britney Nguyen

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05-27-26 1017ET