Marvell Earnings: Take the Hint—Emphatic Long-Term Guidance Is Credible and Worth Buying In

Key Morningstar Metrics for Marvell Technology

• Fair Value Estimate

  : $130

• Morningstar Rating

  : ★★★★★

• Morningstar Economic Moat Rating

  : Narrow

• Morningstar Uncertainty Rating

  : High

What We Thought of Marvell Technology’s Earnings

Marvell Technology MRVL reported strong fiscal fourth-quarter results and provided an even better, raised outlook for fiscal 2027 and fiscal 2028. In fiscal 2027 (calendar 2026), Marvell expects $11 billion in sales (30% growth), followed by $15 billion in fiscal 2028 (40% growth).

Why it matters: Marvell is a significant beneficiary of robust data center and AI spending with its portfolio of connectivity and compute chips. We see it as well-diversified across networking, optical, and custom AI chips (XPUs), taking share and growing rapidly in the medium term.

• Management was emphatic in providing two-year explicit guidance, and we view it as credible. Market talk has swirled over the past year surrounding Marvell and potential share losses, but we focus on strong results and execution that we expect to continue.
• Marvell is growing rapidly (42% growth in fiscal 2026) as it benefits from secular trends within rapid data center spending. We expect further penetration of custom XPUs at large AI customers like AWS and Microsoft, along with greater optical content in data centers, over the next five years.

The bottom line: We raise our fair value estimate for narrow-moat Marvell to $130, from $120, to incorporate bullish two-year guidance above our model that we see as credible. Shares popped about 15% after hours, but we still expect significant upside for investors from here.

• Our valuation implies a 22 times multiple over fiscal 2028 (calendar 2027) earnings, while the market implies 15 times. We see this low market-implied valuation suggesting weak growth after the next two years, which contrasts with our view that data center spending growth will continue.
• As for the market musings over share loss for Marvell’s XPU with AWS—we think the market is missing a multisourcing dynamic, and we don’t expect meaningful share loss from here. Furthermore, XPUs are a minority exposure versus Marvell’s optical business, where it has its best competitive position.