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On Wednesday, Morgan Stanley (NYSE:MS) maintained its Equalweight rating and $90.00 price target for Marvell Technology Group Ltd . (NASDAQ:MRVL), which currently trades at $55.21 with a market capitalization of $47.5 billion. According to InvestingPro data, the stock has shown significant volatility with a beta of 1.82, reflecting the dynamic nature of the semiconductor market. The firm’s analyst, Joseph Moore, addressed concerns about Marvell’s business prospects, particularly its second custom silicon artificial intelligence customer, which is widely believed to be Microsoft (NASDAQ:MSFT)’s Maia 2. Contrary to a recent downgrade by another entity suggesting Marvell had lost this business to Broadcom (NASDAQ:AVGO) Inc., Moore affirmed that industry checks indicate Marvell still holds the design.
Moore highlighted that Marvell’s first custom silicon client is Amazon (NASDAQ:AMZN) for Trainium 2 and the second is Google (NASDAQ:GOOGL) for custom ARM processors. He noted that while Broadcom aspires to win the business, there is ongoing debate about the current status. Industry contacts have reassured Morgan Stanley that the design remains with Marvell, emphasizing that switching vendors would be a complex, multi-year process, especially since Maia 2 is a full front-end design by Marvell.
The analyst pointed out the high switching costs associated with such a change. He explained that unlike the Trainium project where much of the design IP comes from Microsoft, Maia 2 is a comprehensive design effort from Marvell, making a transition to a different vendor a significant undertaking.
Despite positive commentary from Marvell about the progress of the program, which is expected to generate its first revenue in the second half of 2026, Morgan Stanley is taking a cautious stance. Moore mentioned the historically low success rate of first-generation ASICs, indicating that while the program is progressing well, they are not anticipating substantial revenue in the first year. However, InvestingPro analysis shows promising forecasts, with revenue expected to grow by 42% in FY2026, suggesting potential upside in the company’s diversified business model.
Morgan Stanley concluded that while the stock remains tactically interesting in the near term, the lack of revenue upside from these positive checks has led to a somewhat lower conviction compared to peers. The firm’s stance remains an Equalweight rating with a $90.00 price target on Marvell shares. InvestingPro analysis indicates that Marvell is currently trading at elevated EBITDA and revenue multiples, with 13 additional exclusive ProTips available to subscribers. For deeper insights into Marvell’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US equities.
In other recent news, Marvell Technology has reaffirmed its revenue guidance for the first quarter of fiscal year 2026, projecting net revenue to be approximately $1.875 billion, with a refined guidance range of plus or minus 2%. This update reflects a more precise expectation than the previous range of plus or minus 5%. The company also announced the postponement of its Investor Day to an unspecified date in 2026 due to macroeconomic conditions. Meanwhile, Marvell has successfully integrated its Structera Compute Express Link devices with AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC) processors, enhancing memory performance for cloud data centers. Stifel analysts have adjusted their price target for Marvell to $80 from $115, maintaining a Buy rating. This revision comes as Marvell’s AI-related revenues have exceeded forecasts, driven by demand from cloud service providers. Additionally, Marvell is reshuffling its board leadership, with Brad Buss set to become the new Lead Independent (LON:IOG) Director. The company will host a webinar on June 17, 2025, to discuss its custom AI infrastructure ASIC business, a key growth area.
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