Goldman Sachs believes that, despite previously elevated market expectations, the company has driven a modest near-term increase in its share price, supported by strong data center demand and resilience in AI-related businesses. However, Goldman Sachs maintains its 'neutral' rating, noting that the medium- to long-term outlook will depend on data center growth targets, progress in its ASIC collaboration with Google, and demand shifts driven by Agentic AI.
$Marvell Technology (MRVL.US)$ It delivered a quarterly report closely aligned with Wall Street expectations and bolstered market confidence with better-than-expected guidance for the next quarter. Management also signaled its intention to raise full-year guidance for FY27/28.
In its latest research note, Goldman Sachs reported that Marvell Technology’s first fiscal quarter revenue reached $2.418 billion, broadly in line with Goldman Sachs’ forecast of $2.396 billion and the Wall Street consensus of $2.412 billion, representing a 27.6% year-over-year increase and a 9.0% sequential rise. Meanwhile, the company provided second fiscal quarter revenue guidance with a midpoint of $2.700 billion, surpassing Goldman Sachs’ estimate by 3.4% and the Wall Street consensus by 3.0%, demonstrating a clear positive surprise. Management also indicated it would raise its full-year guidance for FY27/28, though no specific figures were disclosed.
Goldman Sachs noted that ahead of this earnings release, market expectations for Marvell were already elevated due to strong earnings reports from peers and sustained high capital expenditures by key customers. Against this backdrop, the better-than-expected guidance still managed to drive a modest uptick in the stock price, reflecting underlying resilience in the company’s fundamentals. Goldman Sachs maintains a Neutral rating on Marvell with a 12-month price target of $125, implying approximately 40% downside from the share price of $208.26 at the time of the report.
All key metrics in the quarterly report met expectations across the board.
Marvell’s core financial metrics for the first fiscal quarter closely matched forecasts from both Goldman Sachs and Wall Street. Revenue came in at $2.418 billion, 0.9% above Goldman Sachs’ estimate and 0.2% above the Wall Street consensus. Data center revenue totaled $1.833 billion, exactly matching both Goldman Sachs’ and Wall Street’s predictions. Communications and other revenue reached $585 million, exceeding Goldman Sachs’ forecast by 2.8% and the Wall Street consensus by 0.8%, contributing slightly to the overall beat for the quarter.
Profitability remained solid as well. Non-GAAP gross margin was 58.9%, 15 basis points above Goldman Sachs’ estimate and 7 basis points above the Wall Street consensus. Non-GAAP operating margin stood at 35.0%, in line with the Wall Street consensus and 27 basis points above Goldman Sachs’ projection. Non-GAAP earnings per share (EPS) were $0.80, exactly matching the Wall Street consensus and $0.01 above Goldman Sachs’ estimate.
Second-quarter guidance exceeded expectations across the board.
Marvell’s guidance for the second fiscal quarter surpassed market expectations across revenue, gross margin, and earnings per share. The midpoint of its revenue guidance is $2.700 billion, with a range of $2.565 billion to $2.835 billion—3.4% above Goldman Sachs’ forecast and 3.0% above the Wall Street consensus—translating to year-over-year growth of approximately 30.1% (based on the lower end of the guidance range) to 34.6% (based on the upper end).
The midpoint of the non-GAAP gross margin guidance is 58.75%, 25 basis points above Goldman Sachs’ forecast and 16 basis points above the Wall Street consensus. The midpoint of the non-GAAP EPS guidance is $0.93, 2.8% above Goldman Sachs’ estimate and 1.8% above the Wall Street consensus. Operating expense guidance was set at $600 million. Management also indicated room for an upward revision to its FY27/28 full-year guidance but did not provide quantitative details.
Three core variables will dictate the stock’s trajectory going forward.
Goldman Sachs believes that Marvell's medium-term stock performance will primarily hinge on three key issues, and expects investors to closely question management on these topics during the earnings call.
First, updates on data center revenue growth targets. The market will closely monitor whether management provides clearer, quantified guidance on its CY2026/27 data center revenue growth objectives, as this will directly influence how the market prices the long-term growth potential of the company’s AI infrastructure business.
Second, potential progress on the Google ASIC partnership. Management’s commentary regarding a potential ASIC collaboration with Google will be a key focus of the call. The expansion of its custom compute chip business into new customers directly affects Marvell’s competitive positioning and market share trajectory in the AI chip market.
Third, the impact of Agentic AI on the company’s fundamentals. As AI applications evolve from inference toward autonomous agents (Agentic AI), the market seeks clarity on how this trend will specifically affect Marvell’s product demand, revenue mix, and long-term growth path.
Goldman Sachs maintains a Neutral rating with a $125 price target.
Despite solid quarterly results and better-than-expected guidance, Goldman Sachs maintains a Neutral rating on Marvell with a 12-month price target of $125, derived from a 28x P/E multiple applied to normalized EPS estimates of $4.50—implying approximately 40% downside from the current share price of $208.26.
Goldman Sachs forecasts Marvell’s revenue to grow from $8.195 billion in FY26 to $11.117 billion in FY27, $15.356 billion in FY28, and $19.615 billion in FY29, with corresponding EPS of $3.27, $5.00, and $6.96, respectively.
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