On Wednesday, Marvell Technology Group Ltd . (NASDAQ:MRVL), now valued at $83 billion, received a boost in confidence from Raymond (NS:RYMD) James as the firm raised its price target on the company's shares to $120, up from the previous target of $90. The Outperform rating was reaffirmed, reflecting a positive view of the company's financial performance and future prospects.
According to InvestingPro data, MRVL has delivered impressive returns, surging 59.6% year-to-date and trading near its 52-week high of $98.72.
The semiconductor company's third-quarter results and fourth-quarter outlook surpassed expectations, according to Raymond James.
A significant increase in custom silicon projects, particularly with Amazon (NASDAQ:AMZN) Web Services (AWS), along with ongoing success in the Optical connectivity sector, were key highlights mentioned by the analyst. InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.79, indicating solid liquidity to meet short-term obligations.
Marvell's artificial intelligence (AI) revenue is now projected to exceed $2 billion, which represents about 35% of its total sales for the year. This figure notably exceeds the company's earlier forecast of $1.5 billion. The management team at Marvell emphasized the long-term nature of its customer engagements, especially with AWS, and expressed confidence in reaching a roughly 20% market share in the over $40 billion custom ASIC market.
The demand for Optical products is expected to remain robust, driven by product cycles for 1.6T and 800ZR technologies. The company is also experiencing growth in data center switching, making strides in automotive, edge computing, and PCIe connectivity markets. Additionally, a cyclical recovery in Carrier, Networking, and Storage markets is anticipated to provide a tailwind as the company moves into the calendar year 2025.
In light of these developments, Raymond James has increased its estimates for Marvell and reiterated its Outperform rating, signaling a bullish stance on the stock's trajectory. With an EBITDA multiple of 86.6x, the stock currently trades at premium valuations. Discover more detailed valuation metrics and 12+ additional key insights with InvestingPro, including exclusive Fair Value analysis and comprehensive financial health scores.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.