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On Thursday, TD Cowen maintained a Buy rating on Marvell (NASDAQ: MRVL) stock, while reducing the price target from $125.00 to $95.00. With the stock currently trading at $90.14 and a market capitalization of $78 billion, Joshua Buchalter, the analyst at TD Cowen, provided insights into the decision, citing a challenging environment with limited upside potential. Despite this, he noted that Marvell continues to execute its plans effectively. According to InvestingPro data, analyst targets for MRVL range from $90 to $188, suggesting potential upside remains.
Buchalter’s analysis pointed out that while the data center business is progressing as anticipated, investors might have expected more growth following recent capital expenditure statements from major clients. With annual revenue of $5.77 billion and a revenue growth rate of 4.7%, he mentioned that the latest remarks regarding Trainium 3 at Amazon (NASDAQ:AMZN) Web Services (AWS) should clarify any uncertainties, and Marvell’s progress with its third hyperscale customer, slated for 2026/27, along with other partnerships, remains on track. For deeper insights into Marvell’s growth metrics and financial health, InvestingPro subscribers have access to over 30 additional key indicators and exclusive analysis.
The analyst’s financial model for Marvell remains largely unchanged, and he still sees the potential for the company to exceed $15 billion in data center revenue by calendar year 2028. Trading at an EV/EBITDA multiple of 81.9x, the stock appears richly valued according to InvestingPro’s Fair Value analysis. The revised price target reflects the current market conditions yet maintains confidence in Marvell’s long-term prospects.
Marvell, a semiconductor company, has been focusing on its data center operations, which are a significant part of its business strategy. The company is working towards establishing itself as a key player in this sector, with plans to expand its reach and customer base over the coming years.
In conclusion, while the immediate outlook presents challenges that have led to a lowered price target for Marvell stock, TD Cowen’s stance remains positive, emphasizing the company’s consistent execution and promising future in the data center market.
In other recent news, Marvell Technology Group Ltd (NASDAQ:MRVL). reported substantial revenue growth in its Data Center segment, with a 24% sequential increase and a 78% year-over-year surge, reaching $1.37 billion. Analysts from Needham, Piper Sandler, KeyBanc, and Stifel have adjusted their price targets for Marvell, citing market trends and valuation adjustments. Needham lowered its target to $100, while maintaining a Buy rating, and Piper Sandler reduced its target to $95, keeping an Overweight rating. KeyBanc set a new target of $115, maintaining an Overweight rating, and Stifel also adjusted its target to $115, reiterating a Buy rating.
Marvell’s artificial intelligence (AI) revenue is projected to significantly exceed the initial $2.5 billion target for fiscal year 2026, with Needham raising its estimate to $3.565 billion. The company’s AI business continues to show strong growth, particularly in custom ASICs and optical components, with double-digit sequential growth anticipated in the upcoming quarter. Marvell’s management has expressed confidence in future revenue from custom silicon projects with Amazon Web Services, projecting growth in fiscal years 2026 and 2027. Analysts have highlighted Marvell’s leadership in AI and data center silicon, noting the company’s success in securing next-generation projects.
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