Barclays downgrades Marvell stock to Equalweight on data center concerns

Investing.com - Barclays downgraded Marvell Technology (NASDAQ:MRVL) from Overweight to Equalweight on Monday, while maintaining an $80.00 price target for the semiconductor company. According to InvestingPro data, the stock, currently trading at $87.95, appears slightly overvalued despite its impressive 70% surge over the past six months.

The downgrade reflects Barclays’ concerns about Marvell’s ability to achieve its data center targets of approximately $7 billion for next year, despite the company’s strong intellectual property portfolio and position in the AI infrastructure build-out. InvestingPro analysis shows Marvell’s revenue is expected to grow 41% this fiscal year, with analysts maintaining a bullish consensus despite near-term challenges.

Barclays highlighted Marvell as "one of the biggest battleground stocks" in its coverage universe, noting the contrast between the company’s strategic position in interconnect evolution and uncertainties about its future performance compared to other AI-focused companies. With a market capitalization of $75.8 billion and a beta of 1.94, the stock’s volatility reflects its battleground status. For deeper insights into Marvell’s competitive position and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.

Beyond 2026, Barclays expressed concerns about competitive pressures, specifically mentioning that the "lion’s share of AI XPU" appears to be moving to Broadcom (NASDAQ:AVGO), while Marvell may lose market share in its core optical business, particularly at 1.6T.

The investment bank indicated it would consider re-engaging with the stock after gaining more clarity on Marvell’s ASIC roadmap, suggesting a cautious approach until the company’s future direction becomes more defined.

In other recent news, Marvell Technology has been upgraded by S&P Global Ratings to ’BBB’ from ’BBB-’, with a stable outlook. This upgrade is attributed to improved revenue scale and profitability, driven by strong demand in AI and cloud infrastructure. The data center segment, a key growth area for Marvell, saw an 88% revenue increase in fiscal 2025, with expectations of 43%-45% growth this fiscal year. Stifel has raised its price target for Marvell to $95, highlighting substantial growth in the company’s optical business, which has expanded significantly since acquiring Inphi in 2021. Needham also increased its price target to $95, maintaining a Buy rating, following comments from CEO Matt Murphy about the custom silicon business. Additionally, several Marvell executives, including CEO Matt Murphy, have purchased shares in the open market, indicating confidence in the company’s future. Stifel reiterated its Buy rating, emphasizing Marvell’s strong portfolio in data infrastructure and its strategic partnership with TSMC. These developments underscore Marvell’s strong position in the evolving technology landscape.

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