Marvell Technology Stock Soars, yet There Could Be More Fuel in the Tank

Marvell Technology (MRVL) has been on a remarkable rally, surging 85% over the past year. Optimistic investor sentiment continues to be driven by a steady flow of uplifting updates, including advancements in data center interconnect technology, breakthroughs in AI-focused architectures, and collaborations with key industry players. It seems that these developments are setting the stage for an acceleration in revenue and earnings growth in the quarters ahead, potentially justifying Marvell’s premium valuation. Given such a strong growth narrative, I remain bullish on the stock.

Recent Developments Propel Marvell’s Momentum

Last month, I wrote a bullish article on Marvell, but I didn’t anticipate just how quickly a flood of positive updates would roll in. Over the past few weeks, Marvell has announced several compelling developments driving renewed confidence among investors, including myself. Let me guide you through the highlights while keeping the technical jargon manageable.

First, Marvell introduced the Aquila Coherent-lite DSP, an exciting technology tailored for connecting data centers over short distances. To put this into context, data centers, which are now viewed as the backbone of the internet, need to exchange huge amounts of data rapidly and efficiently. Aquila basically makes this process faster, more scalable, and more energy-efficient, which is crucial as the demand for AI and cloud computing continues to skyrocket. This ensures that smaller, campus-based data centers can keep pace with the growing strain on global networks​, which should drive growing demand from Marvell’s smaller customers.

Next up is the 1.6 Tbps LPO Chipset, designed to tackle another crucial challenge. This technology focuses on improving how computers within data centers communicate with each other. In the past, copper cables were the standard for these connections, but they’re now facing limitations in terms of speed and distance. Marvell’s chipset, in this case, acts like a high-speed upgrade, enabling faster and more reliable connections within AI-focused data centers. I think this improvement will be key to keeping up with the increasingly demanding workloads of modern AI.​

Another big news story lately was tied to Marvell’s custom high-bandwidth memory (HBM) compute architecture. In partnership with memory giants such as Samsung (SSNFL) and Micron (MU), Marvell has introduced a smarter way to merge memory into high-performance processors. This has resulted in faster and more efficient handling of AI tasks. If we analogize processors to engines, this architecture gives them a “turbocharger”, allowing them to, again, tackle more demanding AI workloads.

Marvell Leverages Industry Trends to Accelerate Growth

What’s exciting about these advancements is how well they match up with the bigger trends in the industry that are boosting Marvell’s growth. With AI and cloud computing expanding so fast, there’s a huge need for better interconnect and computing solutions. That’s where Marvell’s rejuvenated portfolio shines.

To quantify this potential, let’s look at Wall Street’s expectations, which are quite optimistic concerning Marvell’s growth prospects. Specifically, for Q4 of Fiscal 2025, revenue growth is projected at 25.9%, a strong increase from the previous quarter’s 6.9% growth. Thereafter, revenue is anticipated to accelerate further, with consensus estimates forecasting 60.6% growth in Q1 and 55.4% in Q2 of Fiscal 2026. For the full FY2026, revenue growth is anticipated to hit 41.4%, also stressing the massive acceleration expected next year.

These estimates may indeed look quite stretched but nowhere near impossible. The integration of Aquila and LPO technologies into data center ecosystems and the gradual adoption of custom HBM and CPO architectures are likely to fuel sustained growth. This is because Marvell addresses critical bottlenecks in AI and cloud computing, which position it to capture an outsized share of these rapidly expanding markets​.

Marvell’s Premium Reflects Significant Growth Potential

Now, despite the stock’s steep rally, I would argue that Marvell’s valuation appears reasonable in light of its growth potential. Marvell is on track to grow its EPS by an impressive 77% in Fiscal 2026 (i.e., calendar 2025), up from a modest 4% growth expected this year (i.e., Fiscal 2024 ending this January). An overall acceleration is set to endure, with EPS projected to rise by 43% in Fiscal 2027. The above-revenue growth nicely illustrates the scalability of Marvell’s operations as revenues climb, too.

Currently, Marvell trades at about 32 times its expected earnings for Fiscal 2027. While this multiple is, no doubt, elevated. Yet, it can be somewhat justified by Marvell’s leading position in its niche semiconductor space. Also, besides driving growth, Marvell’s latest developments are likely to ensure its relevance in an increasingly competitive industry. In fact, as economies of scale kick in and Marvell’s dominance solidifies, today’s valuations could pave the way for further gains from the stock’s current levels​.

Is Marvell a Good Stock to Buy Today?

Despite the stock’s stretched rally, Wall Street analysts remain very optimistic about Marvell’s prospects. Specifically, MRVL stock continues to feature a Strong Buy, with recent analyst ratings of 26 Buys and two Holds over the past three months. At $123.61, the average MRVL stock price target implies a 6.4% upside potential.

See more MRVL analyst ratings

For top-tier advice on buying or selling MRVL stock, turn to Christopher Rolland. He is the most accurate and profitable analyst covering the stock over the past year, boasting an outstanding average return of 41.5% per rating and an impressive 85% success rate.

Key Takeaway

Marvell Technology has been firing on all cylinders lately, with a barrage of meaningful updates showing real progress in key areas like data center connectivity and memory integration. The company is clearly solving practical problems for its customers, and that’s reflected in investors’ confidence regarding its near- and medium-term growth expectations. Sure, the stock isn’t cheap, but with the kind of momentum Marvell has, it’s hard not to feel good about where it’s headed.