Company Overview Marvell Technology just completed the sale of its Automotive Ethernet business to Infineon Technologies for $2.5 billion, strengthening its focus on AI data center infrastructure while the acquired business featured a design-win pipeline of $4 billion by 2030. The company’s AI and Cloud data center segment reported a record $1.49 billion revenue in the most recent quarter, representing a stunning 69% year-over-year growth, with more than 90% of revenue now driven by AI and Cloud applications. Marvell announced a significant capital return initiative including a new $5 billion stock repurchase authorization.
What makes Marvell particularly compelling is that the company sold more than $1.5 billion worth of AI chips in fiscal 2025 and expects to blow past its $2.5 billion AI revenue guidance in the current fiscal year, as two of its customers for custom AI chips are ramping up demand at an incredible pace. Marvell expanded its relationship with Amazon in December last year through a five-year agreement under which the chipmaker will supply multiple products, including custom AI processors and networking chips, for Amazon’s data centers.
Key Technical and Fundamental Drivers
Explosive Growth Ahead → 154% EPS Surge Expected Marvell is expecting earnings of $0.61 per share in the first quarter of fiscal 2026 on revenue of $1.88 billion, which would translate into a year-over-year increase of 154% in earnings and a 62% jump in revenue.
$5 Billion Buyback → Management Confidence Signal The company’s September announcement of a $5 billion buyback program included an immediate $1 billion accelerated share repurchase, providing a floor of support by signaling management’s confidence and reducing the share count to boost future EPS.
Custom AI Chip Leader → Amazon & Google Partnerships Marvell ranks third among top semiconductor picks for 2025, leading the high-performance PAM4 DSP field and playing a significant role in custom ASIC design, with major projects in collaboration with Amazon and Google.
Oppenheimer Top Pick → AI Infrastructure Play Oppenheimer analysts identified Marvell as a top semiconductor pick for 2025, with the stock trading at 31 times expected fiscal 2026 EPS, positioned to benefit from custom ASICs alongside companies like Broadcom and NVIDIA.
87% Upside Potential → $112B Market Cap Target Assuming Marvell maintains its five-year average price-to-sales multiple of 9.4, its market capitalization could jump to $112 billion over the next three years, pointing toward a potential 87% surge in stock price.
Market Takeaway Marvell returned to growth in fiscal 2025 after earlier declines, with revenue increasing almost 5% year-over-year to $5.8 billion. Importantly, the company’s growth is set to accelerate remarkably from the current fiscal year, driven by two cloud hyperscale customers ramping up custom chip deployments. Marvell enjoyed a strong September rally, surging 30% last month, boosted by the $5 billion buyback announcement and an upbeat AI narrative, though the stock pulled back after TD Cowen downgraded to Hold on October 1st.
According to 31 analysts, Marvell carries a “Buy” average rating with a 12-month stock price target of $94.68, representing a 13.95% increase from current levels around $83. Some investors see Marvell’s leadership in AI infrastructure and strong custom silicon pipeline as catalysts for explosive growth, assigning a fair value as high as $122 per share, while more cautious analysts cite fair values as low as $58 based on customer concentration concerns.
Marvell recently showcased its advanced interconnect portfolio for AI data center infrastructure at the European Conference on Optical Communication, including Co-packaged Optics (CPO) platform for AI scale-up and 200G/Lambda 1.6T PAM4 Optical Interconnect featuring the Ara 3nm PAM4 DSP. The company is currently trading at 10.5 times sales, which isn’t too expensive when compared to the U.S. technology sector’s price-to-sales ratio of 7, especially given that Marvell’s growth is set to accelerate rapidly. With the $2.5 billion Infineon deal completed, custom chip orders ramping from Amazon and Google, and 154% EPS growth on the horizon, Marvell represents a compelling under-the-radar semiconductor play for investors seeking exposure to the AI infrastructure buildout beyond the usual suspects.