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Wolfe Research maintained its Outperform rating and $90.00 price target on Marvell (NASDAQ:MRVL) Wednesday following the company’s AI webinar. The firm highlighted Marvell’s projection of a $94 billion AI total addressable market over the next several years, with potential market share of approximately 20%. According to InvestingPro data, Marvell has demonstrated strong momentum with 15 analysts recently revising their earnings estimates upward, while the company maintains its position as a prominent player in the Semiconductors industry. The stock currently trades near $70, with analysts setting price targets ranging from $64 to $133.
The semiconductor company outlined a vision that could support roughly $19 billion in datacenter revenue and $11 billion in custom XPU revenue by calendar year 2028, compared to under $1.7 billion in custom revenue in Wolfe’s model for fiscal year 2026. This represents a significant potential increase from Marvell’s total revenue of $5.8 billion in fiscal year 2025 and current consensus estimates of $9.6 billion for calendar year 2026. InvestingPro analysis reveals that Marvell has maintained a robust 16% revenue CAGR over the past five years, with current revenue growth at 21.6%. Get access to over 30 additional key metrics and insights with InvestingPro’s comprehensive research report.
Marvell announced two new projects with emerging hyperscalers, adding to three XPU customers announced last year. The company also revealed more than a dozen "XPU-attach" projects involving networking and other custom processors to support hyperscalers’ proprietary rack-scale infrastructure, which Wolfe Research believes are largely networking-based projects that align with Marvell’s strengths.
Despite the positive announcements, Wolfe Research noted that investor concerns persist regarding the sustainability of current project revenue. The firm pointed out that "the nature of the custom silicon business is that success in one generation doesn’t necessarily guarantee success in the next generation," though Marvell management reportedly remains confident in follow-on projects with existing customers.
The research firm concluded that while the event showcased Marvell’s expanded AI opportunities beyond XPUs themselves, it didn’t fully address investor concerns about project sustainability. For investors to assign a full multiple to Marvell’s custom AI business, Wolfe Research believes they need greater conviction that each new project represents compounding revenue growth. Based on InvestingPro metrics, Marvell currently operates with a moderate debt level and maintains healthy liquidity with a current ratio of 1.3. While the company shows promising growth potential, it currently trades at elevated EBITDA and revenue multiples, suggesting investors are pricing in significant future growth expectations.
In other recent news, Marvell Technology has maintained its Buy rating from multiple investment firms, reflecting positive sentiment around its custom AI potential and market positioning. UBS reiterated its Buy rating with a $100 price target, citing Marvell’s expanding customer base in custom computing solutions and its engagements with major tech companies such as Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT). Benchmark also maintained its Buy rating and a $95 price target, highlighting Marvell’s potential to capture a significant market share in the Data Center and accelerated custom compute segment by 2028. Loop Capital echoed this sentiment with a Buy rating and a $90 price target, emphasizing the potential for Marvell’s custom AI ASICs to become a multi-billion-dollar revenue stream. Stifel also reiterated its Buy rating, setting an $80 price target, and noted Marvell’s strong position in the custom AI space, emphasizing its extensive customer engagement. Meanwhile, Cantor Fitzgerald raised its price target to $75 from $60, maintaining a Neutral rating and expressing some concerns about Marvell’s ability to meet its market share targets without further details on specific customer engagements. These recent developments highlight the varied but generally optimistic outlook on Marvell’s growth potential in the custom AI and data center markets.
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