Marvell (MRVL) stock closed the May 28 trading session up 3.09% at $204.03. The upbeat close followed the release of the first-quarter (Q1) fiscal year 2027 earnings report on May 27. The stock has rallied 141% year to date, as of Friday morning, May 29. Meanwhile, the SPDR S&P 500 index (SPY) is up about 10.66% in the same period.The fabless semiconductor giant has outpaced the S&P 500, thanks to its participation in the broader semiconductor rally driven by the AI boom.Positive news driving Marvell’s stock includes:Strong fourth-quarter (Q4) fiscal 2026 earnings report in MarchAmazon’s extension of its partnership with AnthropicMarvell’s acquisition of Polariton TechnologiesIntel’s first-quarter earnings boost confidence in the semiconductor sectorNvidia invested $2 billion and entered into a partnership with MarvellAMD invested $6.5 million in MarvellAnalysts have been resetting their price targets just before earnings, as the expectations were high. Now that the earnings have dropped, Bank of America has tweaked its price target again.Key facts from Marvell’s Q1 earnings reportMarvell reported record revenue of $2.418 billion, up 28% year over year (YoY). GAAP and non-GAAP gross margins were at 52.1% and 58.9%, respectively.The company has a vast portfolio of products that spans computing, including custom AI chips (XPUs), optics, networking, storage, and security.Probably the most important products in Marvell’s portfolio are Data Center Interconnect (DCI) Modules, which are used to transmit data over regional fiber networks.Chairman and CEO Matt Murphy touted the growth of the interconnect module sales during the earnings call.“The increase in our revenue outlook continues to be driven by our data center business, which we now expect to grow approximately 50% this fiscal year. Notably, we expect our interconnect business to grow more than 70% [YoY], well above our prior expectation of 50% growth.”
Marvell reported record revenue of $2.418 billion, up 28% year over year.Shutterstock
Marvell provided guidance for Q2:Net revenue of $2.700 billion +/- 5%GAAP gross margin in the range of 52.1% to 53.1%GAAP diluted net income per share of $0.37 +/- $0.05 per shareThe company also raised its fiscal year 2028 revenue outlook, now expecting 45% YoY growth to $16.5 billion. This is approximately $1.5 billion higher than the prior outlook.Bank of America raises Marvell stock price targetIn a research note shared with me, Bank of America analyst Vivek Arya and his team updated their opinion on Marvell stock.The team noted that the company beat and raised again, as the optics business continues to grow.Analysts raised their fiscal year 2027, 2028, and 2029 pro forma EPS estimates by 6%, 9%, and 29%, respectively, to $4.06, $6.11, and $10.02. They noted that their model suggests Marvell’s pro forma EPS could be 2.5x by 2028 and nearly 4x by 2030.More Tech Stocks:Bank of America resets Amazon stock forecast on key product launchBank of America resets Microsoft stock forecast after earningsBank of America resets Google stock forecast after key eventArya said the outlook of $10 billion in XPU sales for fiscal year 2029 provided by Marvell’s management is reasonable. However, he noted that the company’s free cash flow margin, which is in the 20% to 25% range, is below that of other high-growth AI peers, such as Nvidia, Broadcom, Credo Technology, and Astera Labs, which are in the 35% to 50% range.Arya reiterated a buy rating for Marvell stock and raised the price target to $240 from $200.Of 38 analyst ratings, 32 rate Marvell a buy and six a hold, with an average price target of $208.64, according to MarketBeat.Bank of America analysts noted downside risks for Marvell:Loss of visibility in key custom Application-specific integrated circuit (ASIC) projectsCompetition in AI computeCyclical industry risks, including a potential slowdown in legacy storage, enterprise networking, and carrier marketsUpside risks:Faster-than-anticipated ramp/visibility in major custom ASIC projectsContinued growth in the DSP-based pluggable market versus new LPO/LRO techsShare gains in emerging AEC/CPO/scale-up switch markets against incumbentsRelated: 5-star analyst sets jaw-dropping Nvidia stock price target