Marvell Stock Price Forecast - MRVL Shares Powers Ahead With FY27 $10B Revenue Target

NASDAQ:MRVL Surges on Explosive AI Data Center Growth and FY27–FY28 Acceleration

Marvell Technology (NASDAQ:MRVL) continues its climb toward leadership in the semiconductor industry, driven by AI data center expansion, optical innovation, and aggressive revenue targets. The stock trades near $96.53, up nearly 4% on the day, with a market capitalization of $85.7 billion. Following its Q3 FY26 earnings, Marvell reported $2.07 billion in revenue (+37% YoY) and $0.76 EPS (+77% YoY), both beating consensus estimates. Operating margins expanded to 36.3%, the highest in company history, reflecting strong execution and cost efficiency.

Q3 FY26 Results Confirm Operational Strength and Market Leadership

Marvell’s gross margin reached 59.7%, while its operating margin jumped 660 basis points year-over-year. This performance reflects disciplined cost management and a favorable product mix weighted toward data center, custom ASIC, and electro-optical solutions. The company now expects full-year revenue to reach $8.2 billion, with its core data center division contributing over 70% of total sales. Management attributed the outperformance to accelerating AI adoption across hyperscalers and record demand for AI-optimized networking architecture.

Data Center Revenue Soars 38% to $1.52 Billion

The data center segment remains the core driver of growth, generating $1.52 billion in quarterly revenue, up 38% year-over-year, and now accounting for 73% of total revenue. Within this segment, electro-optical systems represent 50%, custom ASICs 25%, and storage/switching another 25%. CEO Matthew Murphy highlighted that demand for high-bandwidth connectivity in AI clusters continues to accelerate faster than general cloud spending. He expects data center revenue to grow 30% YoY in FY27, driven by hyperscaler orders and rapid adoption of AI-specific optical interconnects.

Celestial AI Acquisition Strengthens Optical Advantage

Marvell’s acquisition of Celestial AI for $3.25 billion positions it at the forefront of optical data transfer technology. Celestial’s photonic fabric complements Marvell’s electro-optical portfolio, enabling next-generation connectivity for AI and HPC architectures. The acquisition is projected to add $500 million in revenue by FY28, scaling to $1 billion by FY29. Post-acquisition, Marvell’s total addressable market expands from $33 billion to $94 billion by 2028. Partnerships with Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) confirm that Marvell will play a pivotal role in future AI infrastructure.

Margin Expansion and Capital Discipline Drive Profitability

Marvell’s focus on efficiency is evident in its cost controls and balance sheet improvements. Operating expenses declined from $741 million in FQ4 2025 to $515 million in FQ4 2026, a reduction of 44%. Free cash flow reached $463.5 million (+69.9% YoY), supported by disciplined inventory management and capital efficiency. The company maintains $2.71 billion in cash and $4.47 billion in debt, providing sufficient flexibility for continued R&D investment. Gross margin remains stable near 60%, while operating leverage continues to expand through higher data center contribution.

FY27–FY28 Guidance Signals Structural Growth

Management projects FY27 revenue at $9.93 billion (+25% YoY) and FY28 at $18 billion (+40% YoY), supported by AI infrastructure growth, Celestial AI integration, and increased silicon content per server. The company forecasts FY27 EPS of $3.55 and FY28 EPS of $5.00, implying accelerating operating leverage and top-line expansion. Murphy emphasized that Marvell’s custom ASIC and electro-optical segments will contribute roughly equal revenue by FY28, creating a balanced, scalable growth profile across verticals.

Electro-Optical and ASIC Segments Fuel AI Infrastructure Cycle

Marvell’s electro-optical segment is projected to grow 35% YoY in FY27, driven by optical interconnect deployment in large-scale AI clusters. These systems are replacing copper-based architectures, reducing power consumption and improving data throughput. The custom ASIC segment is expected to grow 20% in FY27, fueled by tailored AI processors for cloud hyperscalers. Together, these divisions will account for nearly 80% of FY28 revenue, reinforcing Marvell’s strategic pivot toward the AI compute stack.

XPU Recovery Strengthens Mixed Portfolio Resilience

The XPU (accelerator processor) segment, which had underperformed in 2024, posted a sequential 2% gain and a 38% YoY increase. This rebound reflects improved visibility into design wins from Amazon’s Trainium 4 and Microsoft’s Athena accelerators. The segment’s gross margin rose to 51.6%, while operating margin climbed to 17.9%, confirming profitability recovery. This improvement supports Marvell’s multi-segment stability and strengthens its diversification beyond networking.

Valuation, Institutional Positioning, and Analyst Sentiment

At a forward P/E of 33.1x, Marvell trades at a 38% premium to semiconductor peers, justified by its superior earnings momentum. The company’s PEG ratio of 0.99 suggests undervaluation relative to its 37% revenue CAGR. Institutional investors continue to accumulate exposure, with hedge fund ownership up 18% quarter-over-quarter. Over 43 Wall Street analysts currently rate MRVL a Buy, with an average price target of $113, implying 17% upside. Insider transactions remain supportive, as executives have increased holdings through share-based compensation programs tied to AI-driven performance metrics.

Competitive Landscape and Execution Risks

Key risks include dependency on major hyperscalers (AMZN, MSFT), which account for a significant portion of Marvell’s data center sales. Supply chain complexity and elevated inventory levels, now $1.01 billion (17.5% of revenue), may create near-term volatility. However, given the sustained AI buildout cycle and new optical product introductions, inventory levels appear strategically positioned to meet rising demand rather than signaling overcapacity.

Investment Verdict: Marvell Technology (NASDAQ:MRVL) – Strong Buy

Marvell’s execution, margin expansion, and AI infrastructure leadership justify a Strong Buy outlook. With FY27 revenue projected near $10 billion and FY28 targeting $18 billion, MRVL stands as a core compounder in the semiconductor ecosystem. The Celestial AI acquisition cements its lead in electro-optical systems, positioning it as the critical enabler for hyperscale AI interconnectivity. Compared to peers NVIDIA (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO), Marvell offers stronger medium-term revenue acceleration with similar margin resilience. The fair value estimate of $113 per share supports continued upside, driven by AI infrastructure demand, optical innovation, and disciplined capital execution. Verdict: BUY — Marvell remains one of the top AI semiconductor plays for 2026–2028

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