Marvell Technology (MRVL) shares are climbing today, November 11, as dip buyers step in following a brutal sell-off. The stock traded at $167.50, up 25% from its lowest point last week. The bounce comes after a sharp decline that saw the stock fall from a record high of $329 in June to a low of $132 this week.
The recent pressure on MRVL has been tied to broader weakness in data center infrastructure names, as well as company-specific news. Most notably, Marvell announced a $115 billion all-stock acquisition of Lumentum, a deal that has raised concerns among investors. At the time of the announcement, Marvell's market cap exceeded $250 billion, but it has since fallen to around $135 billion. Lumentum's stock has also dropped sharply, suggesting that many market participants expect the deal to fail or face significant hurdles.
Adding to the uncertainty are growing worries about the artificial intelligence (AI) sector. Some analysts have warned that the AI boom could be a bubble, and recent developments have done little to ease those fears. For instance, Anthropic, which was reportedly considering a public offering at a $2 trillion valuation, is now expected to list at $1.3 trillion or lower. Additionally, reports indicate that OpenAI's losses have widened in recent quarters.
Despite these headwinds, Marvell's underlying business continues to show strong growth. In its latest quarterly report, the company posted a 37% year-over-year revenue increase to over $2.7 billion, with management guiding for further acceleration. The data center segment was a key driver, with revenue up 46% from the prior year. The CEO stated that AI-related bookings remain exceptionally robust and that the company is raising its revenue outlook for fiscal 2027 and 2028.
Analysts remain largely bullish on Marvell's fundamentals. According to Yahoo Finance data, consensus estimates project third-quarter revenue to jump 52% to $3.16 billion, and fourth-quarter revenue to rise 68% to $3.74 billion, bringing the full-year figure to over $12 billion. Earnings per share are expected to grow from 76 cents to $1.1 in the near term, with annual EPS reaching $4.22.
However, the Lumentum deal has prompted several analysts to trim their price targets. Needham lowered its target from $400 to $300, while Wells Fargo cut its from $365 to $285. RBC, Susquehanna, and Cantor Fitzgerald have also reduced their targets. The average analyst target still stands at $300, implying roughly 94% upside from current levels.
From a technical perspective, the stock has been in a steep downtrend, falling from $300 in October to a low of $132. It broke below the $163 support level, which was the neckline of a double-top pattern, and has now retested that level. The shares remain below the 50-day and 100-day exponential moving averages, and are hovering near the 61.8% Fibonacci retracement level.
In the near term, the stock could continue to bounce, potentially toward the psychological $200 level. However, if the broader sell-off resumes, a drop back toward $100 is possible. The key question is whether this rebound is a genuine recovery or just a dead cat bounce.
This article is for informational purposes only and does not constitute financial advice.
