Marvell (NASDAQ:MRVL) might be one of the less heralded chipmakers, but like many of its peers, it has been on a strong run, climbing by 110% year-to-date. The stock is now sitting at an all-time high and looks set for another uptick in today’s session following a better-than-expected quarterly readout from networking peer Cisco.
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That should build on yesterday’s 8% gain, which came in the wake of news AMD has taken a stake in the company, albeit a small one, but symbolic, nonetheless. Yesterday also featured a very positive note on the firm from BofA’s Vivek Arya, an analyst ranked among the top 1% on Wall Street, who calls Marvell a “top pick.”
Arya raised his AI networking TAM forecast across CY26–CY30, and now expects the AI connectivity TAM to increase by roughly $6 billion to $14 billion over the period, driven primarily by Ethernet transceivers, with CPO (co-packaged optics) also “contributing modestly.”
Against this backdrop, Arya highlights Marvell as a key beneficiary, particularly within Ethernet transceivers over CY27–CY28, where the TAM is now expected to increase by approximately $7 billion and $10 billion, respectively. He points to Marvell’s exposure across DSPs, TIAs, and laser/modulator drivers used in optical transceivers. DSPs remain the primary optics revenue driver today, accounting for roughly 20% to 25% of the bill of materials in 800G and 1.6T transceivers. Based on a $10 billion increase in CY28 transceiver TAM, he estimates roughly $2 billion of incremental DSP TAM, with Marvell assumed to retain a 60% to 70% share at these generations. This implies more than $1.2 billion of additional DSP opportunity. Including TIAs and drivers, each contributing around 5% or more of the bill of materials, Arya raised his non-CPO optics outlook for CY27–CY28, with a larger upward revision in CY28 reflecting higher conviction in 1.6T adoption.
The analyst also slightly raised the CPO outlook, citing stronger TAM expectations and highlighting CPO scale-up fabric as another area of strength for Marvell. Additionally, the custom silicon forecast is slightly raised, supported by a higher overall AI data center systems TAM and stronger demand for bespoke ASIC programs, including the Microsoft-related CY28 ramp, which management had previously framed more conservatively.
Overall, the analyst raised CY27–CY28 revenue estimates by 1% and 8%, respectively, and raised EPS by 3% and 15% to $5.60 and $7.80, modestly above consensus at $5.48 and $7.49.
That results in a new price objective of $200 (up from $125), signaling room for additional gains of 12% over the one-year timeframe. Arya’s rating stays a Buy. (To watch Arya’s track record, click here)
It’s mostly Buys among Arya’s colleagues too. The stock claims a Strong Buy consensus rating, based on a mix of 22 Buys and 4 Holds. However, going by the $140.59 average price target, a year from now shares will be changing hands for a 21% discount. As such, watch out for more price target hikes or, on the other hand, rating downgrades shortly. (See MRVL stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.