Marvell Earnings: We Agree With the Ambitious Multiyear Confidence, and Celestial Looks a Great Fit

Key Morningstar Metrics for Marvell Technology

• Fair Value Estimate: $120.00
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: High

What We Thought of Marvell Technology’s Earnings

Marvell Technology’s MRVL October-quarter results and January-quarter guidance were positive and in line with our estimates, while management provided bullish guidance for the next two fiscal years. Marvell also announced the acquisition of Celestial AI for up to $5.5 billion.

Why it matters: Fiscal 2027 guidance agreed with our above-consensus model, but fiscal 2028 implies a robust acceleration in custom chip revenues that well exceeded our model. We see Marvell firing on all cylinders, with many high-quality opportunities in data center and AI chips to drive growth.

• We continue to see strong custom chip placement for Marvell, counter to the primary bear narrative. We believe Marvell remains designed into AWS’ Trainium chip alongside Alchip, and we expect significant shipment growth in fiscal 2028 with the ramping of Microsoft’s next Maia chip.
• Celestial is a great fit for Marvell, focusing on optical connectivity to improve efficiency and speed in AI accelerators. It is a near-zero-revenue startup, but we liked to hear Marvell’s aggressive ramp expectations for revenue, starting in fiscal 2028 (calendar 2027).

The bottom line: We raise our fair value estimate for narrow-moat Marvell to $120 per share from $90, behind stronger organic data center growth over the next five years. Shares look attractive at our new valuation, with a long, rapid growth runway, even after rising 8% after hours.

• Celestial looks value-neutral to us, and our valuation hike is purely organic. We believe Marvell is paying a fair price for an asset with a fledgling, but immense, growth opportunity over the next five to 10 years.
• Data center sales are Marvell’s overwhelming driver, and we now expect average annualized growth above 30% over the next three years. We see custom chips leading this growth, both from higher shipments and new customers. We see optical connectivity as Marvell’s second-leading driver.