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On Thursday, William Blair maintained an Outperform rating on Marvell Technology Group Ltd . (NASDAQ:MRVL), emphasizing the company’s sustained momentum in the artificial intelligence (AI) market. With a market capitalization of $78 billion and trading near its 52-week high, InvestingPro analysis indicates the stock is currently trading above its Fair Value. The firm’s robust data center performance is attributed to persistent demand for AI solutions. Marvell’s AI business, as reported in the fourth quarter, is equally divided between its Application-Specific Integrated Circuit (ASIC) programs and Digital Signal Processing (DSP) solutions, which are critical for linking AI servers into racks and larger clusters.
Marvell’s ASIC segment is engaged with the top four hyperscalers, including providing AI accelerators for Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT), a CPU for Google (NASDAQ:GOOG), and a custom Network Interface (NASDAQ:TILE) Card (NIC (NASDAQ:EGOV)) for Meta Platforms Inc. (NASDAQ:META). Amazon emerges as the most significant contributor to Marvell’s revenue among these clients, with growth propelled by the volume ramp-up of Amazon’s latest generation chips, Trainium 2. The company’s revenue grew 4.7% over the last twelve months to $5.8 billion, maintaining a healthy gross profit margin of 41.3%.
The company’s networking division also saw substantial growth, with its optoelectronic products, such as 800G Pulse Amplitude Modulation (PAM) products and 400ZR data center interconnect solutions, as well as its Ethernet switching business, particularly the Teralynx product line, both experiencing double-digit sequential increases.
Looking forward, Marvell’s management anticipates beginning production of its latest 1.6T DSP solutions, which are being developed on a 3-nanometer process, in the second half of fiscal 2026. This forward-looking statement signals the company’s ongoing commitment to innovation and expansion within the AI sector. Analysts maintain a strong bullish consensus on MRVL, with targets reaching as high as $188 per share. For deeper insights into Marvell’s financial health and growth prospects, including 10+ additional ProTips, check out the comprehensive research report available on InvestingPro.
In other recent news, Marvell Technology Group Ltd. has been the subject of multiple analyst revisions following its latest financial results. The company reported substantial revenue growth in its Data Center segment, with a 24% sequential increase and a 78% year-over-year surge, aligning with expectations. Marvell’s artificial intelligence (AI) revenue is projected to surpass its initial target for fiscal year 2026, with Needham raising their estimate to $3.565 billion. The company anticipates strong growth in its custom silicon programs for Amazon, expecting revenue increases in fiscal years 2026 and 2027.
Several firms have adjusted their price targets for Marvell, reflecting varying degrees of optimism. Needham lowered its target to $100 while maintaining a Buy rating, and Piper Sandler reduced its target to $95, keeping an Overweight rating. KeyBanc and Stifel both revised their targets to $115 but retained positive ratings, citing confidence in Marvell’s long-term prospects. Barclays (LON:BARC) also adjusted its target to $130, maintaining an Overweight rating despite noting that Marvell’s performance did not fully meet elevated expectations.
The company’s AI and data center segments continue to show promise, with expectations of double-digit growth in the upcoming quarters. Analysts from these firms have expressed confidence in Marvell’s leadership in AI and data center silicon, with projections for continued success in custom ASICs and optical components. Despite the adjustments in price targets, the overall sentiment remains positive regarding Marvell’s future growth potential.
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