A wave of analyst upgrades has swept across Marvell Technology, with HSBC setting the highest price target on the Street at $300 and a flurry of other banks boosting their estimates to between $230 and $275. The catalyst? A torrid first-quarter earnings report and guidance that underscore the chipmaker’s expanding role in AI infrastructure, particularly in custom silicon and high-speed optical interconnects.
Marvell delivered record quarterly revenue of $2.418 billion for the first quarter of fiscal 2027, up 28% year-on-year and ahead of market expectations. The data center segment, which now accounts for roughly 76% of total revenue, generated $1.833 billion, climbing 27%. Adjusted earnings per share came in at $0.80, topping forecasts, while GAAP net income slumped to $34.5 million from $177.9 million a year earlier — a drop attributable to higher costs and investment spending.
The company’s custom silicon business is emerging as a central growth engine. Marvell has locked in more than 18 design wins at major U.S. hyperscalers, representing a cumulative revenue opportunity of $75 billion over the lifetime of those projects. Management expects the custom ASIC segment to expand more than 20% this fiscal year and sees the potential to double in fiscal 2028, with a longer-term ambition of surpassing $10 billion in annual revenue from this line alone by 2029.
Interconnect technology, including the optical modules and networking gear that tie together clusters of AI accelerators, is accelerating even faster than anticipated. Marvell upgraded its growth forecast for interconnect revenue to more than 70% for fiscal 2027, up from a prior estimate of roughly 50%. The scale-out switch business is projected to exceed $600 million this year and cross the $1 billion mark in fiscal 2028. A key tailwind came from Nvidia, which invested $2 billion in March 2026 to integrate Marvell’s custom XPUs and networking solutions into its NVLink Fusion and AI-RAN platforms.
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The financial underpinnings remain robust. Operating cash flow hit a record $638.8 million, translating into free cash flow of $483.1 million — a margin of 20%. Marvell is deploying that cash aggressively: it bought back $200 million of its own shares during the quarter and paid $54 million in dividends, and it plans to funnel roughly $1 billion into supply chain prepayments this year to lock in manufacturing capacity ahead of surging demand.
Looking ahead, Marvell guided for second-quarter revenue of $2.7 billion, representing 35% year-on-year growth, with adjusted EPS of approximately $0.91. For the full fiscal year, the company now expects revenue of around $11.5 billion, followed by about $16.5 billion in fiscal 2028.
Despite the upbeat numbers, the stock edged lower on Friday, slipping 1.19% to €174.02 as some investors took profits following a blistering 128% year-to-date gain. The shares still trade just shy of their 52-week high of €179.
Analyst revisions continued to roll in. Besides HSBC’s “Buy” rating and $300 target, Barclays raised its price objective to $275 (Overweight), J.P. Morgan lifted its target to $240 (Overweight), and Oppenheimer set a new target of $250 (Outperform). KeyBanc weighed in at $260 (Overweight), while Deutsche Bank and UBS settled at $240 and $230 respectively, both with “Buy” ratings. The consensus remains firmly at “Strong Buy,” with several models suggesting fair value in the $251–$253 range based on sustained free-cash-flow margins and the expected acceleration in revenue.
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