Marvell Technology gets praise from Wall Street after investor day

Marvell Technology gets praise from Wall Street after investor day

Marvell Technology MRVL received praise from Wall Street on Wednesday after the semiconductor company held its investor day and said it expects as much as $90B in revenue in a few years.

Shares fell 1.4% in premarket trading after rising nearly 6% on Tuesday.

Citi analyst Atif Malik, who has a Buy rating and $275 price target on Marvell, said the company's long-term target of $30 or more in earnings by 2031 was “well ahead” of the expectations of $20 in earnings per share.

“Marvell expressed confidence in its Interconnect outlook, while noting that the success in the Custom business is the primary variable driving its FY31 (CY30) revenue range of $70B-$90B, and includes only a portion of the Google deal,” Malik wrote in a note to clients. “The Custom outlook is supported by design-win roadmaps with its four largest hyperscale customers (Google, AWS, Microsoft, and Meta), with no individual socket expected to contribute more than 10% of revenue. The outlook also assumes no contribution from AI lab engagements or scale-in opportunities, which involve bringing optical I/O directly inside the package (micro-VCSELs, micro-LEDs, and optical SerDes) for sub-10cm chip-to-chip and chip-to-memory interconnects.”

For fiscal 2028, the company now sees revenue of $20B, compared to prior guidance of $18B and analyst estimates of $18.2B. Additionally, the company said it expects customer revenue in fiscal 2029 to be up 200% or more. Total revenue by fiscal 2031 is expected to be between $70B and $90B, Marvell added.

Needham analyst N. Quinn Bolton upped his price target to $400 from $300 after the event on the basis that the guidance for the coming years, including fiscal 2031, was much stronger than he anticipated.

“Having repositioned its product portfolio targeting cloud/data center opportunities, Marvell is experiencing strong revenue growth driven by growing investments in AI infrastructure,” Bolton wrote in a note to clients. “The company is the leading supplier of interconnect solutions for data center applications and is increasing its share in the XPU and XPU Attach custom silicon markets. Similarly, the company is gaining share in scale-out switching applications and is poised for strong growth as scale-up design wins, including NPO, CPO and switch fabric designs, ramp to production over the next 12-24 months.”

Bolton reiterated his Buy rating on Marvell.

Morgan Stanley analyst Joseph Moore also upped his price target on Marvell, moving to $300 from $268, citing the strong guidance.

“Targets at least 20% higher than we had forecast, assuming a positive $3 trillion capex scenario in 2030 drives 4x revenue growth; mgmt also guided up next year by about 10%,” Moore wrote in a note to clients. “We like the growth drivers but don’t know that they needed to raise the bar this high.” Moore kept his Equal-Weight rating on the stock.

Several other Wall Street firms also upped their price targets on Marvell, including TD Cowen and UBS.DisclaimerContent provided by Seeking Alpha is intended for information purposes only, and that Seeking Alpha does not offer any personalist investment advice and is not a licensed securities dealer, broker, US investment adviser or investment bank.