Google-related revenue is expected to become a much bigger contributor for Marvell in fiscal 2029, the chipmaker said.
- Morningstar raised its MRVL price target to $300, citing AI demand and gains in custom chips.
- Goldman Sachs kept its Neutral rating, saying elevated expectations could keep the stock range-bound.
- Retail sentiment turned “extremely bullish,” with MRVL message volume surging 860% on Stocktwits.
Marvell Technology, Inc.’s shares dropped 8.2% in early premarket trading as the chipmaker failed to provide a meaningful increase in its long-term revenue outlook in its second-quarter report, despite signing a major new AI chip agreement with Google.
If the stock move holds in regular trading, it would be the stock’s worst single-day drop in over a month.
Analysts Still See Long-Term AI Upside
Still, analysts backed Marvell, saying its expanding customer base, diversified product portfolio and growing demand for custom chips give the company a strong runway for growth.
“Marvell now holds three blue-chip custom ASIC customers in Amazon, Microsoft, and Google, and XPU attach is a meaningful contributor to growth that reflects its broad portfolio,” analysts at Morningstar said in an investor report.
“Marvell is positioned well for future technology transitions, including a secular shift to customized chips for AI, higher bandwidth needs, and the proliferation of optics. It is highly leveraged to AI spending, where we see it gaining material share over the medium term,” they said, while raising their price target on the stock to $300 from $270.
Goldman Sachs retained its ‘Neutral’ rating and $195 price target on MRVL. The firm expects the stock to be range-bound after earnings as investor expectations were already elevated heading into the quarter based on peers’ reports and robust spending at key customers, the research firm said.
Marvell Sees Bulk Of Google Deal Revenue In 2029
Last week, Marvell announced a custom chip deal with Alphabet’s Google that could bring in $120 billion in revenue through fiscal 2033 and make the search giant one of its biggest investors with an up to $12.2 billion stake.
On the post-earnings analyst call, the management Marvell CEO Matt Murphy said Google-related revenue is already partly reflected in the company’s custom-chip revenue targets through fiscal 2028, but will contribute much more significantly in fiscal 2029.
He added that custom-chip revenue is expected to more than double next year, with “upside bias” to Marvell’s previous $10 billion-plus fiscal 2029 target.
Retail View On MRVL
On Stocktwits, the retail sentiment for MRVL climbed higher in the ‘extremely bullish’ zone, with 24-hour message volume rising 860%. MRVL was among the top three trending stocks on the platform at the time of writing.
“$MRVL Very tempted to buy a few shares for a swing trade. I still don’t understand why this is down after a stellar earnings,” said a trader.
Another wrote: “$MRVL Low debt, growing rev’s, years spent specializing in what is necessary to increase the chip communication speeds… New customers will come in behind Alphabet and Nvidia.”
Year to date, MRVL stock has gained 187% as of its last close.
Marvell’s Q2 Recap
Marvell reported strong July-quarter results and raised its guidance for the next two years. Sales rose 37% to $2.74 billion, beating analysts expectations of $2.71 billion, with data center segment sales rising 46% to $2.17 billion.
Fiscal 2028 sales are now projected at about $18 billion, $1.5 billion higher than the prior view. Data-center sales should grow more than 60%, and custom business is expected to more than double.
Third-quarter revenue was guided to $3.15 billion, plus or minus 5%, with data center segment sales expected to rise more than 20% sequentially and about 75% year over year.
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