On Thursday, Raymond (NS:RYMD) James maintained its Outperform rating on Marvell Technology Group Ltd . (NASDAQ:MRVL) stock and increased its price target to $130.00, up from the previous $120.00. The semiconductor company, now valued at over $92 billion, has seen its stock surge 75% year-to-date, reflecting strong investor confidence in its AI potential, robust IP portfolio, and strategic customer engagements.
According to InvestingPro data, 28 analysts have recently revised their earnings expectations upward, suggesting growing optimism about the company's prospects.
During recent investor meetings with Marvell's CEO Matt Murphy and SVP of Investor Relations Ashish Saran, the Raymond James analyst found the company's outlook to be positive, despite not discussing near-term trends.
The management team's strategy and execution were praised, particularly in the area of custom silicon, where Marvell's robust IP, including SERDES, custom High Bandwidth (NASDAQ:BAND) Memory (HBM), and packaging, were highlighted alongside its system-level expertise in networking and connectivity.
Marvell's management team expressed confidence in their strategic engagement with Amazon (NASDAQ:AMZN) Web Services (AWS) and downplayed any concerns about a potential decrease in demand in the second half of 2025 or 2026. Moreover, the collaboration with Customer C, identified as Microsoft (NASDAQ:MSFT), is expected to ramp up in 2026, representing a significant opportunity for Marvell.
The demand for optical connectivity is also strong, with additional support coming from upcoming 1.6T/800ZR product cycles slated for 2025. Provided there is no major downturn in AI spending, Raymond James anticipates a potential revenue compound annual growth rate (CAGR) of over 25% for Marvell over the next three to four years, with a path towards approximately $7 earnings per share (EPS). InvestingPro analysis indicates the company is expected to turn profitable this year, with analysts forecasting EPS of $1.57 for fiscal 2025.
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The upward revision of the price target from $120 to $130 is attributed to the higher conviction in the company's custom silicon ramps, which are expected to contribute significantly to Marvell's growth and performance in the coming years.
In other recent news, Marvell Technology has been the subject of numerous developments. CFRA analyst Angelo Zino raised the price target for Marvell to $130.00, citing optimistic growth prospects. The company's earnings estimates have been revised upwards by 28 analysts, reflecting positive anticipation for the upcoming period. Adjustments to the fiscal year 2025, 2026, and 2027 earnings per share (EPS) estimates have also been made, largely due to the expected surge in the production of custom silicon chips.
Marvell's total addressable market (TAM) is projected to grow at a compounded annual rate of 29% through 2028, reaching an estimated $75 billion. Within the custom compute sector, Marvell is expected to maintain a 20% market share, translating to approximately $8 billion in revenue.
Marvell has also recently unveiled a 1.6 Tbps optical chipset and a custom High-Bandwidth Memory (HBM) compute architecture, both aimed at enhancing data transfers and AI performance. These innovations are expected to enhance data center infrastructure utilization and performance.
In addition, Marvell has introduced its Aquila coherent-lite digital signal processor, optimized for distributed campus data centers. Analysts from Morgan Stanley (NYSE:MS) and Raymond James have acknowledged the robust results of the semiconductor sector and adjusted their price targets for Broadcom (NASDAQ:AVGO) accordingly.
Marvell's financial health remains robust with a manageable debt level of $4.1 billion, with net debt at $3.2 billion. These recent developments reflect a series of positive trends for Marvell, including an increase in earnings estimates by 28 analysts.
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