Marvell (MRVL) stock is down almost 8% year to date, at the time of writing, Tuesday afternoon, March 3, according to Yahoo Finance. Marvell’s stock downward trend started a few days after the release of the Q3 earnings report on Dec. 2.

The stock was first hit on Dec. 5 by The Information reporting that Microsoft is considering Broadcom (AVGO) as a possible chip design partner. Benchmark Equity Research on Dec. 8 downgraded Marvell stock to hold from buy and withdrew its price target, citing the company’s loss of business with Amazon, reported TipRanks.

Marvell co-designs Microsoft’s Maia line and Amazon’s Trainium line for the companies, and it would have been catastrophic for the company had it lost these contracts. The stock crashed on this news. Following the reports, Marvell CEO and Chairman Matt Murphy dismissed them.

“I can tell you this, from Tuesday to Friday, nothing changed, we didn’t lose any business,” he told CNBC.

Marvell will release its Q4 earnings report on March 5. Read the article by TheStreet’s Noah Weidner for a recap of Marvell’s Q3 report.

Outlook for Q4 fiscal year 2026:

  • Net revenue is expected to be $2.2 billion +/- 5%.
  • GAAP gross margin is projected to be 51.1% to 52.1%.
  • GAAP diluted net income per share is expected to be $0.36 +/- $0.05 per share.
  • Non-GAAP diluted net income per share is projected at $0.79 +/- $0.05 per share. Source: Marvell press release
RBC Capital Markets expects Marvell Q4 revenue and non-GAAP EPS of $2.2 billion/ $0.79.

RBC Capital Markets expects Marvell’s optical strength to drive a decent quarter

Shutterstock RBC Capital Markets Managing Director Srini Pajjuri updated his opinion on Marvell stock outlook ahead of earnings in a research note, TipRanks reported. 

The analyst said he expects revenue and non-GAAP EPS of $2.2 billion/ $0.79 for Q4 and to slightly beat consensus estimates. For Q1, he predicts Broadcom’s outlook will be slightly above the consensus of $2.27 billion for revenue and $0.75 for EPS.

“While Optical customers reported strong growth, we believe Trainium business is mostly booked for the year,” Pajjuri wrote.

He noted that the AWS/OpenAI partnership will be a long-term positive for the company and that Trainium2 demand remains healthy. He believes Marvell’s 2026 outlook for at least 20% growth in custom application-specific integrated circuits revenue is primarily driven by AWS Trainium3.

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More Tech Stocks: In a research note shared with me, Pajjuri reiterated an outperform rating for Marvell stock and a price target of $105, based on 22 multiple of his EPS 2027 estimate.

This price target is also based on the assumption that Marvell stock will continue trading largely with its current multiple over the next 12 months, given 20% to 30% growth potential, share gains, and 35% or greater accelerator total addressable market expansion.

Pajjuri noted risks to Marvell rating and price target:

  • Hyperscaler capex slowdown
  • Stronger-than-expected ASIC competition
  • Linear Pluggable Optics displacing Digital Signal Processor demand

Marvell completes key acquisitions

Marvell has completed its acquisition of XConn Technologies, a provider of advanced PCIe and CXL switching silicon.

Marvell’s switching portfolio is expanded with XConn’s PCI Express and Compute Express Link products, enabling the company to scale up connectivity for next-generation AI and cloud data center architectures.

Related: 5-star analyst resets Broadcom price target before earnings

XConn’s engineering team will help advance Marvell’s UALink scale-up switching roadmap. UALink is an extremely important piece of the AI tech puzzle, as it aims to directly compete with Nvidia’s NVLink.

The company stated that initial revenue contributions from XConn should begin in the third quarter of fiscal 2027, ramping to a $50 million annualized run rate in the fourth quarter of fiscal 2027.

Marvell has completed its acquisition of Celestial AI, a pioneer in optical interconnect technology for scale-up connectivity. The key reason for this acquisition was its Photonic Fabric optical interconnect technology, designed to support high-bandwidth, low-latency connectivity across large-scale AI deployments.

Marvell is now well positioned to become a leader in the emerging scale-up interconnect market, adding a significant, entirely incremental new total addressable market.

“As AI systems continue to scale in size and complexity, customers require innovative connectivity solutions,” Murphy stated.

“The addition of Celestial AI’s Photonic Fabric technology platform complements Marvell’s existing portfolio and enhances our ability to address the most demanding requirements of next-generation AI and cloud data center architectures. We are excited to welcome the talented team from Celestial AI to Marvell.”

Related: Bank of America resets Nvidia price target after earnings