Marvell Technology (MRVL) Stock Forecast & Price Target

Marvell Technology is poised for continued growth, evidenced by its revenue guidance of $2.2 billion for the January quarter, which exceeds market expectations and reflects a 21% increase year-over-year, alongside a projected over 25% year-over-year growth in its Data Center segment by CY26. The company is strategically aligning its segments, showing promising growth indicators with Communications & Other expected to achieve low single-digit percentage growth quarter-over-quarter in FY26, while its Custom Silicon segment is set to rebound, driven by ongoing growth across multiple business lines. Additionally, the expansion of design wins, particularly in the Custom AI sector, suggests a robust pipeline for future revenue generation, with significant contributions anticipated from new contracts beginning in FY28.

Marvell Technology is facing a projected slowdown in its custom XPU growth, expected to decrease to only 20% for CY26, which raises concerns about the company's competitive position, particularly following its losses at Amazon. Additionally, the gross margin is anticipated to decline sequentially by approximately 70 basis points, indicating potential profitability challenges as Custom Silicon becomes a larger part of the product mix. Furthermore, management's outlook for Carrier and Networking, which achieved only 25% quarter-over-quarter growth instead of the anticipated 30%, suggests underlying cyclical weaknesses that could negatively impact future performance across key segments.