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On Thursday, Barclays (LON:BARC) analyst Tom O’Malley adjusted the price target for Marvell Technology Group Ltd . (NASDAQ:MRVL), reducing it to $130 from $150, while maintaining an Overweight rating on the stock. With shares currently trading at $90.14 and a market capitalization of $78 billion, InvestingPro data shows the stock has experienced significant volatility, declining over the past month despite a strong 36% gain over the last six months. O’Malley’s commentary highlighted that Marvell’s performance, although solid, did not meet the elevated expectations set by its peers in the Amazon (NASDAQ:AMZN) supply chain.
Marvell’s recent financial results have come under scrutiny as the company’s near-term numbers for Amazon were not as high as anticipated, which has become a critical factor in a market that is currently unforgiving to any perceived imperfections in AI-related stocks. This response follows a trend where companies like CRDO and ALAB outperformed expectations, raising the bar for others within the same market segment.
Despite the near-term concerns, Marvell’s management remains confident in the company’s growth prospects at Amazon for the fiscal years 2026 and 2027. The company has demonstrated moderate growth with revenue increasing 4.71% over the last twelve months to $5.77 billion. For April, Marvell is guiding a mid-single-digit percentage increase quarter-over-quarter in its Data Center business, with Optical and ASIC segments expected to see double-digit growth. According to InvestingPro analysis, which offers 8 additional key insights about Marvell’s financial health, the company operates with a moderate level of debt and analysts expect profitability to improve this year.
Marvell’s position in the AI market has been subject to volatility, and according to O’Malley, the company’s guidance, though modestly better, may not be sufficient to impress investors given the recent trend of punishing AI stocks despite strong fundamentals. The analyst also pointed out that Microsoft (NASDAQ:MSFT) could present a late CY26 opportunity, meaning that much of Marvell’s ASIC ramp in CY26 could rely heavily on Amazon.
In closing, O’Malley suggested that concerns regarding AI chips are overstated and that trends in custom silicon are improving. He also noted that the current order pause is a near-term positive, indicating that Marvell could be a stock for investors to revisit once the AI market volatility subsides. Trading at an EV/EBITDA multiple of 81.89x, InvestingPro’s Fair Value analysis suggests the stock is currently overvalued. Investors seeking deeper insights can access Marvell’s comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US stocks, which provides detailed analysis of the company’s valuation, growth prospects, and market positioning.
In other recent news, Marvell Technology reported its Q4 FY2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.60, slightly above the forecast of $0.59. The company also exceeded revenue forecasts, reporting $1.82 billion compared to the expected $1.80 billion. Despite these positive results, Marvell’s stock fell sharply by 14.24% in after-hours trading, reflecting potential investor concerns. Citi analysts adjusted their outlook on Marvell, lowering the price target from $136.00 to $122.00, while maintaining a Buy rating, citing the company’s earnings as modestly above expectations.
Jefferies also maintained a Buy rating on Marvell but reduced the price target from $120.00 to $100.00, following the company’s latest financial results. Wolfe Research adjusted its outlook, reducing the price target from $130.00 to $115.00, while keeping an Outperform rating. The firm addressed concerns about Marvell potentially losing a next-generation project to a competitor, which Marvell’s management refuted during their earnings call. Marvell emphasized its ongoing relationship with Amazon, projecting growth in its Amazon ASIC revenue stream, supported by a multi-generational deal signed in December.
Overall, Marvell’s management expressed confidence in the company’s future prospects, highlighting significant growth in AI-related revenues, which now constitute the majority of data center revenue. The company is also targeting over 60% year-over-year revenue growth for Q1 FY2026, with a focus on expanding its custom ASIC products. Analysts from Jefferies and Wolfe Research highlighted Marvell’s strategic positioning to succeed in the next generation of 3nm technology, contingent on delivering working silicon on schedule.
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