On Wednesday, Stifel maintained a Buy rating on Marvell Technology Group Ltd . (NASDAQ: NASDAQ:MRVL) and increased the price target to $125.00, up from the previous $125.00. Currently trading at $95.91 with a market capitalization of $83.08 billion, Marvell has demonstrated remarkable momentum, posting a 59.6% return year-to-date.
The adjustment follows the company's October quarter results, which were at the high-end of its guidance, with revenues growing by 4.6% and non-GAAP earnings per share (EPS) increasing by $0.03 compared to Stifel's estimates.
The firm highlighted Marvell's data center and artificial intelligence (DC/AI) revenue growth of 25% quarter-over-quarter, attributing it to significant custom silicon ramps. This performance is seen as a validation of management's strategic focus initiated years prior.
According to InvestingPro data, the company operates with a moderate level of debt and maintains strong liquidity, with current assets exceeding short-term obligations. Additionally, a robust January quarter forecast suggests an 8.9% increase due to further acceleration in DC/AI, while non-DC segments are also experiencing a cyclical recovery.
Marvell's custom ASIC business is reportedly shifting into a higher gear, with production ramps at two leading hyperscalers. This development is supported by a five-year strategic partnership expansion with Amazon (NASDAQ:AMZN) Web Services (AWS). Moreover, another customer, referred to as "Customer C," is on track for a ramp-up in calendar year 2026, with the combined opportunities expected to be substantial.
Stifel expressed high confidence in Marvell's potential to develop an $8 billion to $10 billion ASIC business over the next decade. The firm reiterated its Buy rating on Marvell, which it considers a leading supplier in the AI/DC silicon market. Trading near its 52-week high of $98.72, the stock currently carries a high EV/EBITDA multiple of 86.6x.
The company is noted for its focus on securing a significant portion of the AI Silicon Supercycle, which is valued at over $75 billion. The raised price target reflects an enterprise value to sales (EV/S) multiple of 14.3x based on Stifel's increased estimates for the calendar year 2025. For deeper insights into Marvell's valuation and 12+ additional ProTips, visit InvestingPro, where you'll find comprehensive analysis in our Pro Research Report.
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