Marvell Technology MRVL stock fell 2% on Wednesday even after the chipmaker outlined an ambitious long-term revenue outlook at its Investor Day.
The broader markets have fallen as record-high Treasury yields weighed on stocks.
Marvell’s revenue outlook prompted TD Cowen to upgrade the stock and raise its price target.
TD Cowen analyst Sean O’Loughlin upgraded Marvell to ‘Buy’ from ‘Hold’ and lifted his price target to $350 from $245.
The new target implies more than 20% upside from recent levels.
In a note cited by TheFly, O’Loughlin said Marvell’s growth drivers had shifted towards its strong connectivity business, while concentration risk linked to custom XPU programmes had been largely reduced.
Marvell targets $90B in fiscal 2031 revenue
At its Investor Day on Tuesday, Marvell set a fiscal 2031 revenue target of $70 billion to $90 billion, compared with $8.2 billion in fiscal 2026.
At the midpoint of the range, management expects about $37.5 billion in revenue from interconnect products and $30 billion from custom products.
The company also raised its fiscal 2028 revenue outlook to approximately $20 billion, above Wall Street’s $18.2 billion consensus estimate, according to Koyfin.
Marvell expects custom revenue to exceed $12 billion in fiscal 2029, compared with its previous target of more than $10 billion.
The company generated about $1.5 billion in custom revenue in fiscal 2026.
Management said the long-term forecast does not depend on winning a major new customer or securing a major design win.
Custom AI chip business expands beyond key customers
Customer concentration has been a concern for Marvell because custom-chip programmes can depend heavily on a small number of large cloud customers.
The company has expanded relationships with hyperscalers through work on Amazon’s Trainium and Microsoft’s Maia chips.
It has also reportedly secured part of Google’s next-generation TPU work.
Broadcom remains a major competitor in custom AI silicon, with relationships including Google and Meta Platforms.
Nvidia continues to dominate AI computing through its GPUs, while custom chips provide cloud companies with an alternative for workloads where specialised designs can improve cost or efficiency.
Marvell’s longer-term strategy also places greater emphasis on data-centre connectivity and networking.
The company expects these businesses to become increasingly important alongside its custom AI chip operations.
Analysts raise price targets after Investor Day
Several analysts increased their valuations following Marvell’s updated outlook.
Jefferies raised its price target to $450 from $325, saying the fiscal 2031 forecast places connectivity at the centre of Marvell’s growth story.
Evercore ISI increased its target to $433 from $275, citing the company’s intellectual property portfolio and flexible business model across merchant, semi-custom and custom solutions.
Raymond James described the fiscal 2031 outlook as “extraordinary” and said scale-up connectivity and optics could become at least as important to the long-term story as custom compute.
Morningstar raised its fair value estimate to $360 from $300 after increasing its fiscal 2031 revenue and earnings estimates by roughly 40%.
The firm acknowledged valuation concerns following the stock’s sharp rise but said the expected growth could make the premium easier to justify.
Marvell’s latest outlook follows record second-quarter revenue of $2.7 billion, up 37% year over year, while data-centre revenue increased 46%.
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