Marvell Technology (MRVL) Stock Forecast & Price Target

Marvell Technology is poised for strong financial performance, as evidenced by its guidance for the January quarter, projecting revenue of $2.2 billion, which exceeds market expectations and reflects a year-over-year growth of 21%. The company's Data Center segment is anticipated to experience over 25% year-over-year growth by calendar year 2026, driven by significant design wins and an expanding customer base in advanced applications such as AI. Additionally, Marvell's recent financial results indicate a robust October quarter revenue of $2.075 billion, showcasing a 37% increase year-over-year and highlighting the successful rebound in its Custom Silicon segment alongside growth in Optics, Switching, and Storage.

Marvell Technology is projected to experience a decline in gross margins by approximately 70 basis points, alongside a slowdown in its custom XPU growth to only 20% by CY26, signaling potential challenges in reclaiming its competitive position in the market. The recent performance of the Carrier and Networking segments fell short of management's expectations, achieving only 25% quarter-over-quarter growth compared to the anticipated 30%, raising concerns about the overall demand in cyclical markets such as Storage and Carrier Infrastructure. Additionally, while there is an anticipated rebound in data center activities, the increasing reliance on Custom Silicon, which tends to have lower margins, is expected to negatively impact gross margins in the coming fiscal years.