Marvell Earnings: Firm Is Not Blinking

Key Morningstar Metrics for Marvell Technology

• Fair Value Estimate
  : $235.00
• Morningstar Rating
  : ★★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : High

What We Thought of Marvell Technology’s Earnings

Marvell Technology MRVL reported strong April-quarter results, with July-quarter guidance above our model, and raised guidance through fiscal 2028 (calendar 2027). Management now expects $16.5 billion in fiscal 2028 revenue, up 10% from its guide just three months ago of $15.0 billion.

Why it matters: Marvell’s data center portfolio continues to gain momentum across custom compute and networking. We’ve been bullish on this opportunity, but we now expect even higher growth in the medium term, led by a longer ramp of custom chip growth and higher optical investments.

• We now expect revenue growth to accelerate through the next three years, into fiscal 2029 (calendar 2028). Our higher expectations are founded on Marvell’s holistic portfolio of networking, optics, and custom compute, all of which are benefiting tremendously from artificial intelligence investment.
• Marvell expects its custom compute revenue to double again in fiscal 2029, after doubling in fiscal 2028, to reach $10 billion, well above our prior model. This growth is astonishing. We see growth led by the ramp of Microsoft’s Maia chip, but also numerous other auxiliary custom programs.

The bottom line: We raise our fair value estimate for Marvell to $235 per share from $130, behind a significantly higher three-year growth forecast. Shares carried huge momentum into earnings and were roughly flat after hours. We see the stock as moderately undervalued at our new valuation.

• Marvell has risen nearly 200% in the last three months, as the market has come around to our bullishness on the firm’s custom compute program and gotten excited about the optics opportunity. The market is pricing Marvell as an optics winner, and we agree.
• We model Marvell to smash its $18 billion data center sales target in calendar 2028, while reaching its $11 billion custom compute target. This upside is entirely from optics, with classic Marvell’s DSP chips for scale-out AI networks and its co-packaged optics with Celestial AI in tow.