Bank of America’s recent upgrade of Marvell Technology from neutral to buy has caused quite a stir in the market. The bank also raised its price target for Marvell to $110, up from $90, following Marvell’s impressive fiscal fourth-quarter results that saw a surge of over 16% in its share price.
Analyst Vivek Arya, who covers semiconductors at Bank of America, cited two key catalysts for the upgrade. He highlighted Marvell’s growing strength in AI optical connectivity and the improved visibility on custom chip programs with tech giants Microsoft and Amazon.
During Marvell’s earnings call on March 5, the company reported record fiscal 2026 revenue of $8.19 billion, a 42% year-over-year increase. Fourth-quarter revenue came in at $2.219 billion, surpassing Marvell’s own guidance. Non-GAAP earnings per share for the quarter reached $0.80, slightly above the Wall Street consensus estimate of $0.79.
The data center segment, which accounted for 74% of total revenue, is where Marvell’s growth story lies. Custom silicon revenue doubled in fiscal 2026 to $1.5 billion, with CEO Matt Murphy expecting further growth in fiscal 2027 and 2028. Marvell’s suite of products, including 1.6T optical interconnects and data center switching, is also expected to see significant revenue growth in the coming years.
Marvell’s guidance for future growth has impressed investors and analysts alike. The company raised its outlook to grow more than 30% year over year, approaching $11 billion. Fiscal 2028 revenue is projected to reach approximately $15 billion, a significant increase from previous estimates.
Analysts across various firms have also raised their price targets for Marvell, with targets ranging from $130 to $140. The average analyst price target stands at around $113, signaling a 49% upside potential from Thursday’s closing price.
Bank of America views Marvell’s current valuation as compelling, trading at a lower multiple compared to its peers. The firm sees the $110 price target as conservative, with a potential upside to $130 based on fiscal 2028 earnings projections.
For investors interested in the AI semiconductor space, Marvell’s recent performance and analyst upgrades signal a strong growth trajectory. The question now is whether Marvell can sustain its gains as expectations continue to rise in the market.
