Marvell's AI Chip Story Has More Upside Ahead
In the fiercely competitive semiconductor industry, Nvidia Corp often captures the spotlight with its groundbreaking AI advancements. However, the industry's next major winners might not be the usual suspects.
In the latest trading session, Marvell Technology (MRVL) closed at $73.62, marking a +2% move from the previous day.
Marvell Technology is underperforming in the market, but has potential for valuation expansion due to changing demand in data center market. Marvell's data center revenue is at an all-time high, benefiting from changing trends in AI chip demand from hyperscalers. Valuation indicates potential upside of 24-25% for Marvell, with expectations of revenue growth through FY27 and expanding operating margins.
Marvell is a leading supplier of semiconductor solutions for data centers and several other markets. It expects AI-related revenue to make up nearly 30% of its business this year.
Marvell notched a healthy rebound in 2023, but shares have stalled. AI chips haven't been enough to offset the downturn elsewhere in the business.
Marvell Technology (MRVL) launches the Alaska A 1.6T PAM4 DSP for active electrical cables focusing on high-speed networking for AI/ML workloads.
Marvell (MRVL) has seen solid earnings estimate revision activity over the past month, and belongs to a strong industry as well.
Recently, Zacks.com users have been paying close attention to Marvell (MRVL). This makes it worthwhile to examine what the stock has in store.
Marvell Technology Inc. NASDAQ: MRVL is a leading semiconductor company in the computer and technology sector sector that designs and manufactures high-performance chips. They are a powerhouse when it comes to their largest market addressing data infrastructure solutions and data centers.
Marvell Technology's 1Q25 results show a clear path to growth recovery, with visible catalysts for acceleration in 2H25. The Data Center segment has shown four consecutive quarters of positive sequential growth, indicating an upcycle. MRVL's valuation is attractive, and the stock should easily trade back to previous levels as the recovery potential becomes more visible.
Marvell Technology's stock price has experienced significant fluctuations in recent years, driven by factors such as Fed policy and AI hype. The company is positioning itself in the data center AI chip market, with both compute and networking solutions. Despite facing competition, Marvell has the potential to capture a significant portion of the AI chip market, which could greatly impact its income.