Marvell Finds $400B AI Opportunity, But Shares Take a Hit

Shares of Marvell Technology Inc (NASDAQ: MRVL ) tanked in early trading on Wednesday, after the company’s Investor Day hosted on Tuesday. 91 per share, BNP Paribas analyst Karl Ackerman said in a note. The Marvell Technology Thesis: The company raised its TAM to $400 billion by 2030, Ackerman said in the note. Check out other analyst stock ratings.

He added that the TAM for: Data Center is estimated at $385 billion, which is up nearly 4x from the prior projection of around $94 billion by 2028 Communications and Other is estimated at $15 billion. Within Data Center, Marvell estimates: Interconnect at $65 billion, representing 65% CAGR Switching and Storage at around $85 billion, reflecting 40% CAGR Custom at about $235 billion, growing at 55% CAGR FY28 Outlook: Management raised their revenue guidance for fiscal 2028 from $18 billion to $20 billion, representing 50% growth, the analyst stated. "The company indicated that the incremental $2B is driven by scale-up optics," he further wrote.

Data Center is expected to reach $18 billion, representing a 70% CAGR from fiscal 2024 to 2028, Ackerman said. Longer-Term Guide: Marvell expects revenue to grow to $70-90 billion by 2030, the analyst stated. 5 billion "Gross margin is guided to 56%-59% with any outperformance in Custom likely driving margins towards the low-end in the range," Ackerman wrote. Management raised their operating margin guidance to 44%-46%, from 38-40% previously, the analyst added.

40 per share, above the company’s target of $30+ by 2030, he further noted. "We remain constructive on Marvell as one of three companies offering a complete portfolio across AI compute and networking for scale-in, scale-up, scale-out, and scale-across applications," the analyst wrote in the note. 83% to $281 at the time of publication on Wednesday. Read Also: Marvell Just Found Nvidia’s Biggest AI Weak Spot — and It’s a $30 Billion Business Image: Shutterstock