Can Marvell (NASDAQ: MRVL) Hit $100 With AI Revenue Surging 76%?
With Shares at $65 and EPS Growing Fast, Is Wall Street Missing the MRVL Rebound? | That's TradingNEWS
Marvell (NASDAQ:MRVL) Trades at Just 21.5x Forward P/E – Is the AI Giant Being Overlooked?
Why Is MRVL Still Stuck Near $65 Despite 63.8% Revenue Growth?
Marvell Technology (NASDAQ:MRVL) is sitting in a strange contradiction: a company delivering massive 63.8% year-over-year revenue growth and $1.9 billion in Q1 FY2026 revenue, yet the stock remains around $65, far from the 2024 peak near $127. That’s a 49% drawdown, even though the business model is expanding into nearly every corner of the AI infrastructure chain.
What’s weighing on the price isn’t poor execution—it’s macro fear, weak momentum, and market hesitation over margins. But numbers don’t lie. EPS came in at $0.62, beating by a penny. The data center business alone now accounts for 76% of revenue, and MRVL just locked in a pivotal expansion with custom XPU partnerships, including a next-gen integration using NVIDIA's NVLink Fusion.
The midpoint for Q2 FY2026 revenue is $2.00 billion, a sequential gain of 5.5%—again above consensus. Investors don’t seem to care. But they should.
AI Custom Silicon Growth Is Exploding—And It’s Reshaping Margins
MRVL’s AI roadmap is now fully centered on custom silicon XPUs—not just general compute. That pivot is paying off. Last quarter’s Data Center revenue surged 76.5% YoY, and management sees this segment continuing to grow mid-single digits QoQ, putting projected growth for Q2 near 72% YoY again.
This surge is dragging down gross margin—now forecasted in the 59%-60% range due to the low-margin nature of custom products. But what investors miss is that operating margin is rising, not falling. Volumes are scaling faster than costs, and MRVL confirmed it will ramp 3nm wafer capacity and launch its next-gen AI silicon by year-end.
This isn’t a margin collapse—it’s a profitable transformation.
Enterprise and Carrier Infrastructure Finally Break the Downtrend
While Wall Street is fixated on AI, it’s the forgotten segments that are quietly contributing to revenue stability. Enterprise networking and carrier infrastructure, which together make up ~15% of total revenue, returned to growth in Q1 FY2026 after several quarters of decline.
Management expects both to expand mid-single digits sequentially in Q2, showing clear signs of a cyclical rebound. This matters. It means MRVL’s AI narrative isn’t carrying the entire company anymore—legacy businesses are re-engaging, just as AI ramps.
Buybacks Surge 70% as Free Cash Flow Strengthens
Marvell’s capital strategy screams confidence. The company repurchased $340 million in stock during Q1—up a massive 70% quarter-over-quarter. The reasoning is obvious: strong free cash flow and a valuation that looks broken. MRVL trades at just 21.5x forward P/E, but with 25%-30% EPS growth forecasts, the PEG ratio is under 0.7—a level rarely seen in the semiconductor space, especially for an AI leader.
This is not just short-term optimism. Marvell has locked in capacity for its 3nm roadmap, showing that CapEx isn’t reactionary—it’s strategic and forward-loaded. It’s doubling down on scale at a time when many peers are still figuring out how to pivot out of GPU bottlenecks.
Valuation Metrics Are Detached from Reality
Even after a 40% bounce from the $42 lows, MRVL’s valuation is hard to justify as bearish. Its forward P/E ratio dipped to 15x at the trough, and even now sits closer to 17x–21.5x, far below peers like NVIDIA, AMD, and even Broadcom, who all command materially higher multiples.
Analysts project EPS of $4 by FY2027, meaning at a modest 25x multiple, MRVL could trade above $100, a full 50% upside from today. More aggressive targets reach $120–130, suggesting a 100% move is plausible in a bullish macro backdrop.
The current average target hovers near $90, giving ample headroom—and most notably, very limited downside, with lower-end expectations still hovering near $60, well above its 2023 base.
To watch real-time chart action:
MRVL Real-Time Chart
AI Infrastructure Slowdown, Tariffs, and Broadcom Competition Are the Key Risks
No stock is risk-free, and Marvell’s biggest headwinds are AI infrastructure fatigue, geopolitical tariffs, and intensifying ASIC competition from Broadcom and NVIDIA. On top of that, hyperscalers continue to vertically integrate, designing more in-house chips.
Yet, MRVL is positioning as an enabler rather than a competitor. With design wins across multiple U.S. hyperscalers, Marvell is inside the walls, not outside banging to get in. Its AI value isn’t just compute—it’s customization, bandwidth, interconnect, and packaging. That breadth is defensive.
Investors will want to watch MRVL’s Custom Silicon forum on June 17th, where near-term roadmap reveals may serve as a stock-moving catalyst.
Verdict: Buy Rating Backed by 50%+ Upside and Operating Expansion
This isn’t a cheap stock by accident. It’s a misunderstood one. Despite explosive data center growth, rising margins, a recovering cyclical base, and valuation multiples stuck near trough levels, NASDAQ:MRVL trades like it's facing a revenue cliff—it’s not. All signs point upward. The stock is a Buy, with $100+ price potential, and $65 as a likely base.
