Key Morningstar Metrics for Marvell Technology
- : USD 235.00Fair Value Estimate
- : ★★★★Morningstar Rating
- : NarrowMorningstar Economic Moat Rating
- : HighMorningstar Uncertainty Rating
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 USD 16.5 billion in fiscal 2028 revenue, up 10% from its guide just three months ago of USD 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 USD 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 USD 235 per share from USD 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 USD 18 billion data center sales target in calendar 2028, while reaching its USD 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.
