This article first appeared on GuruFocus.
Sep 1 – Marvell Technology (NASDAQ:MRVL) saw its shares tumble nearly 18% on Friday after the company reported second-quarter results that came in slightly below Wall Street expectations. While the semiconductor maker missed revenue estimates by a narrow margin, the broader story shows a company still riding powerful growth trends in the data center and artificial intelligence markets.
The chipmaker posted quarterly revenue above $2 billion for the first time, representing 58% growth from a year earlier. Data center sales made up $1.5 billion, or roughly three-quarters of total revenue, underscoring Marvell’s reliance on AI-focused infrastructure spending by hyperscale customers such as Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG). Other business lines, including enterprise networking, carrier infrastructure, consumer, and automotive, accounted for the remaining share.
On the profitability side, Marvell delivered $1.2 billion in gross profit with a non-GAAP margin of 59.4%. Adjusted net income more than doubled year over year to $585.5 million, reflecting the company’s improving operating leverage. Management also guided for third-quarter revenue of about $2.06 billion, which at the midpoint implies 36% growth.
Despite the strong numbers, investors reacted negatively to the revenue miss and concerns over the foundry cycle, triggering the sharp sell-off. Analysts, however, note that Marvell trades below both its historical valuation multiples and the broader industry average. With data center capital spending accelerating and AI demand surging, many see the pullback as an opportunity rather than a red flag.
Marvell’s outlook suggests annualized revenue could surpass $10 billion by the end of fiscal 2026. While risks remain if hyperscalers slow AI spending or if margins weaken, the company’s positioning in semiconductors for cloud, AI, and networking continues to attract long-term investors.
Based on the one year price targets offered by 36 analysts, the average target price for Marvell Technology Inc is $88.42 with a high estimate of $135.00 and a low estimate of $64.31. The average target implies a upside of +40.65% from the current price of $62.87.
Based on GuruFocus estimates, the estimated GF Value for Marvell Technology Inc in one year is $98.65, suggesting a upside of +56.92% from the current price of $62.87.