Shares of Marvell Technology (MRVL) declined today following a downgrade and price target cut from Wall Street’s analyst. TD Cowen analyst Joshua Buchalter downgraded MRVL stock from a “Buy” rating to a “Hold” and also lowered his price target from $90 to $85, implying 1.1% upside potential. While acknowledging Marvell’s long-term growth potential, he cited limited visibility in the company’s custom XPU (AI accelerators) business as a key concern.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Buchalter is a top analyst on TipRanks, ranking #1,145 out of 10,050 analysts tracked. He has a 58% success rate and an impressive average return per rating of 12.20%.
Limited XPU Visibility Calls for a Stock Downgrade
Buchalter is concerned about the limited visibility in Marvell’s custom XPU pipeline and rising competition in its electro-optics segment. He also pointed to the stock’s 30% rally in the past month, noting that the risk-reward profile now looks more balanced. He noted that while Marvell benefits from strong intellectual property (IP) and growing AI demand, investors could find “cleaner stories elsewhere” in the semiconductor space.
Additionally, he highlighted that Marvell’s data center revenues have nearly tripled over the past two years, driven by early XPU design wins and strong demand for its networking silicon. Nonetheless, he warned that future growth remains uncertain due to the “lumpiness” of customer orders and the difficulty of securing follow-on design wins in next-generation programs such as Amazon’s (AMZN) Trainium 3.
Buchalter also revised his projections, forecasting relatively flat revenue from custom ASICs through 2026, while anticipating high-teen growth rates in non-ASIC data center segments. He noted that Marvell’s outlook remains volatile because AI chip demand depends on winning specific deals. Although the total addressable market (TAM) is large, unpredictable wins and tough competition make Street estimates uncertain.
Is Marvell a Good Stock to Buy Today?
On TipRanks, MRVL stock has a Moderate Buy consensus rating based on 23 Buys and nine Hold ratings. The average Marvell Technology price target of $88.20 implies 4.9% upside potential from current levels. Year-to-date, MRVL stock has lost 23.7%.
