This chip stock offers three-to-one upside potential, says Mizuho

Published 26/08/2025, 16:48

Investing.com -- Marvell Technology offers investors the chance of three times more upside than downside over the next 12 months, according to Mizuho analysts highlighting the chipmaker as undervalued despite near-term worries about its business with Amazon.

The brokerage said Marvell’s stock, trading around $73, has lagged the broader semiconductor sector this year and faces low investor interest amid concerns that rival Alchip is taking share in Amazon’s custom AI chip program.

Though company’s strong optical business and growth outlook justify higher confidence.

At current levels, Marvell trades at 26 times projected 2026 earnings and 20 times 2027, which Mizuho said is attractive given expected earnings growth. Consensus estimates for $2.80 in 2026 EPS and $3.60 in 2027 EPS are seen as achievable.

Mizuho noted that most investors prefer exposure to Nvidia, Taiwan Semiconductor, and Broadcom, while Advanced Micro Devices is seen as a cleaner alternative to Marvell.

But it said Marvell’s relative underperformance, the stock is up 15% since April versus a 37% gain for the semiconductor index, leaves it positioned for stronger gains if sentiment shifts.

On Nvidia, Mizuho expects little new information from upcoming results, with revenue guidance likely around $55 billion. It pointed to uncertainty over sales of the company’s H20 chips to China, but said approval for newer B30 products could offset that over time.

Despite Nvidia trading near record highs, Mizuho called it one of the strongest stories in technology, with demand for its GPUs far outstripping supply and new Blackwell and Ultra chips expected to drive growth into 2026.

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