The AI Spending Boom Could Be Just Getting Started for This Company

The 24/7 Wall St. price target for Marvell Technology (NASDAQ:MRVL | MRVL Price Prediction) is $304.24 over the next 12 months. With shares at $280.75 in premarket trading, that works out to 8.4% upside. The model rates Marvell a buy with high confidence.

Data center sales now make up 79% of Marvell’s revenue, and management keeps raising its outlook.

Our target stands slightly above the consensus analyst target of $293.88. That gap shows strong earnings momentum, held back by a 2.26 beta and a valuation that already prices in a lot of good news.

Investor Day Adds Fuel to a 230% Rally

Marvell has gained 6.64% over the past week, 25.59% over the past month and 230.85% year to date. Shares sit 14.9% below the 52-week high of $329.80. On Tuesday, the CEO announced a large long-term revenue target at Investor Day, and TD Cowen upgraded it this morning on that outlook.

In the fiscal second quarter, revenue rose 36.5% to $2.739 billion, ahead of the $2.707 billion consensus. Non-GAAP EPS of $0.94 beat the $0.9289 estimate. Management guided third-quarter revenue to $3.150 billion and raised its fiscal 2027 forecast to roughly $12 billion, up from approximately $11.5 billion.

Why Bulls See $355 and Beyond

The bull case reaches $355.14 within a year. Custom silicon is the main driver. Management expects that business to “more than double year over year in fiscal 2028 and accelerate significantly in fiscal 2029.”

The expanded partnership with Alphabet (NASDAQ:GOOGL) unit Google includes a warrant for up to 7% of Marvell’s shares tied to revenue milestones. Optics add a second growth leg, with 1.6T products “ramping rapidly.”

Management sees fiscal 2028 revenue growing approximately 50%, with non-GAAP operating margin entering the 38 to 40% range this fourth quarter. Marvell carries 8 strong buy and 32 buy ratings, with no sells.

Risks That Could Drag Shares Toward $232

The bear case sees $232.04. A few hyperscalers account for most revenue, so in-house chip design or a spending pause would hit hard. Trade restrictions on Chinese customers, tight wafer and substrate supply, and $4.963 billion in long-term debt add risk.

GAAP operating margin was 16.8% versus 36.6% non-GAAP, shows acquisition-related costs. GAAP net income still rose 58% to $308M.

Marvell Trades at a Steep Premium to Broadcom and NVIDIA

Broadcom (NASDAQ:AVGO) is Marvell’s biggest rival for custom AI ASIC programs at the same hyperscalers. Broadcom is growing faster at a third of Marvell’s forward multiple, and analysts’ average target is $531.31.

NVIDIA (NASDAQ:NVDA) is the benchmark for AI accelerators. It trades at 25x forward earnings with even stronger growth. Next to these two peers, our target looks reasonable. Marvell’s premium depends on growth speeding up into fiscal 2028.

Custom Silicon Ramp Drives Our Upside Case

I’m staying with the 24/7 Wall St. price target of $304.24 and a buy rating with 90% confidence. Guidance keeps moving higher.

The bull thesis improves if custom revenue doubles on schedule and margins reach the 38% to 40% range. It weakens if a major hyperscaler slows down orders. On balance, Marvell earns its premium.

The projections assume Marvell delivers on its current strategy. Results could land well above or below depending on custom silicon development and hyperscaler spending. The same expansion driving Marvell is raising a wider group of suppliers beyond the chipmakers, which we profiled in a free report on seven AI infrastructure names.

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