Key insights
- RBC Capital raised its price target on Marvell (MRVL) due to strength in AWS chip production, particularly the Trainium ASIC. This suggests continued strong growth for Marvell, driven by demand for AI infrastructure. The increased price target and maintained "Outperform" rating could positively influence investor sentiment towards MRVL and potentially other semiconductor companies involved in AI-related technologies. However, near-term upside may be limited by wafer supply constraints.
Investing.com - RBC Capital raised its price target on Marvell Technology Inc. (NASDAQ:MRVL) to $170 from $115 while maintaining an Outperform rating on the stock. The semiconductor company has surged over 200% in the past year, currently trading at $147.84, just shy of its 52-week high of $149.58.
The firm cited near-term strength in PAM-4 optical connectivity and improved visibility for Trainium chip production. Marvell supplies Trainium ASICs, Ethernet switches, DPUs, and optical DSPs to Amazon Web Services.
RBC estimates each gigawatt of capacity represents $2.5 billion to $3 billion in addressable market, with Marvell expected to capture at least half. The firm projects approximately $1.6 billion in custom silicon revenue from AWS this year, up roughly 17%. This aligns with Marvell’s strong revenue growth of 42% over the last twelve months, with analysts forecasting 33% growth for fiscal 2027. According to InvestingPro analysis, the company maintains a perfect Piotroski Score of 9, indicating robust financial health.
The analyst noted that upside may be constrained by tight 3-nanometer wafer supply in the near term. RBC expects the AWS-Anthropic agreement to sustain strong double-digit growth momentum into fiscal year 2028 and beyond.
The new price target is based on 31 times the firm’s calendar year 2027 earnings per share estimate of $5.51, up from a prior multiple of 21 times. RBC left its earnings estimates unchanged. Despite the higher multiple, Marvell’s PEG ratio of 0.12 suggests attractive growth-adjusted valuation. However, InvestingPro data indicates the stock may be overvalued relative to its Fair Value estimate. For investors seeking deeper insights, InvestingPro offers 22 additional exclusive tips and comprehensive analysis for MRVL.
In other recent news, Marvell Technology has been the focus of several notable developments. Erste Group initiated coverage on Marvell with a buy rating, highlighting the company’s partnership with Nvidia and its strong financial performance, including a doubling of net profit over the last five quarters. RBC Capital reiterated its Outperform rating, citing Nvidia’s substantial $2 billion investment in Marvell, which is expected to bolster Marvell’s position in optical connectivity markets. Additionally, GF Securities upgraded Marvell to a Buy rating, driven by anticipated growth in optics demand and potential involvement in cloud service provider compute ASIC programs. Barclays also upgraded Marvell to Overweight, raising its price target based on optimistic industry projections for optical port growth. However, JPMorgan addressed rumors about Marvell securing TPU business from Google, stating these reports are false, though Marvell is engaged in talks about an LPU project with Google. These recent developments indicate growing interest and strategic movements around Marvell Technology in the market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.