Marvell Technology (MRVL) shares slipped about 2% on Wednesday, even as the chipmaker laid out an ambitious long-term revenue target of $90 billion for fiscal 2031 during its Investor Day. The decline came amid a broader market pullback driven by record-high Treasury yields, which pressured technology and growth stocks.
Despite the stock's dip, several Wall Street analysts responded positively to Marvell's updated outlook. TD Cowen upgraded the stock to 'Buy' from 'Hold' and raised its price target to $350 from $245, implying more than 20% upside from recent levels. Analyst Sean O'Loughlin noted that Marvell's growth drivers have shifted toward its connectivity business, reducing concentration risk tied to custom XPU programs.
Marvell targets $90B in fiscal 2031 revenue
At its Investor Day on Tuesday, Marvell set a fiscal 2031 revenue target of $70 billion to $90 billion, compared with $8.2 billion in fiscal 2026. At the midpoint of that range, management expects about $37.5 billion from interconnect products and $30 billion from custom products. The company also raised its fiscal 2028 revenue outlook to approximately $20 billion, above Wall Street's consensus of $18.2 billion, according to Koyfin.
Marvell now expects custom revenue to exceed $12 billion in fiscal 2029, up from its previous target of more than $10 billion. The company generated roughly $1.5 billion in custom revenue in fiscal 2026. Management emphasized that the long-term forecast does not depend on winning a major new customer or securing a major design win.
Custom AI chip business expands beyond key customers
Customer concentration has been a concern for Marvell because custom-chip programs often rely on a small number of large cloud customers. The company has broadened its relationships with hyperscalers through work on Amazon's Trainium and Microsoft's Maia chips, and it has reportedly secured part of Google's next-generation TPU work. Broadcom remains a major competitor in custom AI silicon, with relationships including Google and Meta Platforms.
Nvidia continues to dominate AI computing through its GPUs, while custom chips offer cloud companies an alternative for workloads where specialized designs can improve cost or efficiency. Marvell's longer-term strategy also places greater emphasis on data-center connectivity and networking, which the company expects to become increasingly important alongside its custom AI chip operations.
Analysts raise price targets after Investor Day
Several analysts increased their valuations following Marvell's updated outlook. Jefferies raised its price target to $450 from $325, saying the fiscal 2031 forecast places connectivity at the center of Marvell's growth story. Evercore ISI increased its target to $433 from $275, citing the company's intellectual property portfolio and flexible business model across merchant, semi-custom, and custom solutions.
Raymond James described the fiscal 2031 outlook as "extraordinary" and said scale-up connectivity and optics could become at least as important to the long-term story as custom compute. Morningstar raised its fair value estimate to $360 from $300 after increasing its fiscal 2031 revenue and earnings estimates by roughly 40%. The firm acknowledged valuation concerns following the stock's sharp rise but said the expected growth could make the premium easier to justify.
Marvell's latest outlook follows record second-quarter revenue of $2.7 billion, up 37% year over year, while data-center revenue increased 46%. The company's stock has rallied significantly over the past year on AI optimism, but Wednesday's decline highlights the sensitivity of high-multiple tech names to rising yields.
This article is for informational purposes only and does not constitute financial advice.
