Marvell (MRVL) Is Betting on Microsoft, AWS and Google to Power Its Next Growth Wave
The near-term setup for Marvell Technology Inc. (NASDAQ: MRVL) looks promising. Marvell has already delivered another beat-and-raise Wall Street was looking for, but the more compelling story is what could unfold over the coming years. The company’s second-quarter sales rose 37% to $2.74 billion, beating estimates of $2.71 billion, while adjusted profit came in at 94…
The near-term setup for Marvell Technology Inc. (NASDAQ: MRVL) looks promising. Marvell has already delivered another beat-and-raise Wall Street was looking for, but the more compelling story is what could unfold over the coming years.
The company’s second-quarter sales rose 37% to $2.74 billion, beating estimates of $2.71 billion, while adjusted profit came in at 94 cents per share, compared with estimates of 92 cents. Marvell also forecast third-quarter revenue of $3.15 billion, plus or minus 5%, compared with analysts’ average estimate of $3.03 billion.
On August 25, Rosenblatt analyst Sajal Dogra raised the firm’s price target on Marvell Technology Inc. (NASDAQ: MRVL) to $300 from $240 and keeps a Buy rating on the shares. The same day, Susquehanna analyst Christopher Rolland raised the price target on the stock to $265.00 (from $230.00) while maintaining a Positive rating.
What’s Behind the Bullish Ratings?
Rosenblatt’s expectations for a beat-and-raise for MRVL were driven partly by the more than 25% sequential growth in its optical interconnect business. Earnings results from Lumentum, Coherent, and MTSI have reinforced firm’s confidence in optical demand.
Optical growth, however, was only part of Rosenblatt’s bullish thesis. The firm believes that MRVL’s larger opportunity lies in fiscal 2028 and 2029. This is when the company ramps major custom-silicon programs with some of the world’s largest cloud providers.
On the other hand, Susquehanna is bullish on MRVL driven mainly by its AI networking strength. The firm highlighted robust demand for AWS Trainium, Marvell’s new agreement with Google, and robust read-throughs across optical components and data center interconnects.
Microsoft, AWS and Google Could Drive the Next Leg
Only recently, Marvell announced an expanded agreement with Google to develop custom artificial intelligence silicon. Under the deal, Marvell will help develop a range of custom silicon tied to Google’s TPU ecosystem. Google also received warrants to purchase up to 58.97 million Marvell shares at $206.58 each, with most of the warrants vesting as Google purchases custom products from Marvell. The deal expands Marvell’s hyperscaler relationships, alongside Amazon (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT).
Microsoft’s Maia program is also anticipated to drive the next leg of growth for Marvell. The company reportedly plans to unveil its new Maia 300 AI chip this fall, and if the program scales, Wedbush analyst argues that Marvell would benefit directly through its custom silicon exposure.
Finally, Amazon Web Services’ Trainium chips could also be an important contributor to the company’s custom silicon growth. Marvell has significant exposure to Amazon’s artificial intelligence infrastructure buildout through its custom silicon relationship.
Susquehanna noted how AWS has emphasized that long-term customer demand for AI computing remains “striking” and Trainium engagements had continued to be robust. There may even be “a real chance” it would eventually sell the chip externally as standalone hardware, which Marvell expects its custom business will more than double in FY28 (the firm estimates ~$4B).
Rosenblatt, meanwhile, believes all of these ramps could eventually support an estimated $10.50 in FY2029 earnings power. It also anticipates further upside as scale-up and multi-rack AI architectures increase networking and optical intensity.
The firm also noted that rising chip-development costs increasingly favor suppliers like Marvell. This is because intellectual property can be reused across customers and platforms.
The Bear Case
Rosenblatt, however, doesn’t expect the management to revise its previously stated FY28/29 interconnect/custom framework before Marvell’s Investor Day in October.
Moreover, much of the $300 valuation rests on earnings power that may not fully arrive until FY2029. This leaves investors exposed to execution risks such as delays in custom-silicon programs, customer spending changes, and even competitive pressures.
While optical momentum may support another strong quarter, the long-term thesis is largely dependent on MSFT, AWS, and Google.
Analysis and Bottom-line
Hedge fund positioning shows rising interest in Marvell. The number of hedge funds holding MRVL increased from 79 in the first quarter of 2026 to 96 in the second quarter.
For comparison, Microsoft is more widely held with 273 hedge funds, albeit modestly down from 282. For Amazon, 369 hedge funds held positions in the stock, up from 353 in the previous quarter. The numbers highlight the broader hedge fund ownership in Marvell’s major hyperscaler customers.
Overall, it is quite clear that Marvell is more than just a simple beneficiary of the AI infrastructure boom. Its strong aspects are its strategic customer engagements and co-designing of custom chips. However, the larger question remains whether its cloud-chip programs eventually translate into revenue and earnings that Wall Street expects.
While we acknowledge the potential of MRVL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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