On Monday, Stifel maintained a Buy rating on Marvell Technology Group Ltd . (NASDAQ:MRVL) and increased the price target to $114 from the previous $95. The stock, currently trading at $95.67, has shown remarkable momentum with a 76% return over the past year according to InvestingPro data.
The firm's analyst predicts that Marvell's October quarter results will likely meet or slightly exceed the revenue estimate of $1.45 billion, with a potential boost from its Data Center business. The Data Center segment, particularly custom ASICs, is expected to contribute significantly to the quarter's performance, while revenues from other segments are also anticipated to show recovery.
The analyst also forecasts that the guidance for the January quarter will surpass their estimate of $1.65 billion, a 14.0% sequential increase, driven by ongoing momentum in the Data Center sector, which accounted for 69% of the company's F2Q25A revenues.
While trading at high valuation multiples, InvestingPro analysis shows the company maintains a moderate debt level and strong liquidity position with a current ratio of 1.79. This projection is supported by capital expenditure commentary from hyperscale companies, indicating that non-Data Center end markets may have reached their lowest point.
Marvell's strong position in the market is further bolstered by its relationships with three of the four major North American hyperscalers. Google (NASDAQ:GOOGL) is expanding its use of Marvell's optical and new ASIC products, while Amazon (NASDAQ:AMZN) announced a strategic five-year partnership this morning involving a range of Marvell's technologies, including custom ASICs and Ethernet switching products. Microsoft (NASDAQ:MSFT) remains a key customer for Marvell's data center interconnect and in-data center solutions.
The analyst emphasizes the significance of these customer relationships and the positive outlook for Marvell's Data Center business. The new 12-month price target of $114 is based on a 14.3x multiple of the company's estimated calendar year 2025 enterprise value to sales. With an overall Financial Health score of "FAIR" from InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ US stocks, the firm reiterates its Buy rating, signaling confidence in Marvell's growth trajectory and market positioning.
In other recent news, Marvell Technology has been making notable strides in its strategic partnership with Amazon Web Services (AWS). This collaboration, set to enhance AWS's data center offerings, involves Marvell supplying a variety of data center semiconductors, including custom AI products. The company's adoption of a cloud-first approach is expected to expedite its silicon design process through AWS's advanced compute capabilities.
Analysts have expressed positive sentiments towards Marvell, with firms such as Evercore ISI, Rosenblatt, Susquehanna, and Oppenheimer upholding positive ratings and raising their price targets. These upgrades are based on anticipated growth, a forecasted return to profitability this year, and robust growth in artificial intelligence (AI).
Marvell's revenue and earnings prospects are also being positively impacted by strong AI demand and potential growth in the company's Inphi (NASDAQ:IPHI) and custom ASIC segments. The company's AI sales targets for fiscal years 2025 and 2026 have been revised to $1.5 billion and $2.5 billion, respectively, with analysts suggesting these projections could be conservative.
Furthermore, Marvell reported Q2 revenues exceeding expectations at $1.27 billion. The company is scheduled to release its F3Q25 earnings soon, with analysts forecasting revenues and earnings per share that could outperform both firm and consensus estimates.
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