Marvell’s (MRVL) shares surged as high as 13% on Tuesday afternoon as analysts hailed the U.S. semiconductor company’s new strategic partnership with Nvidia (NVDA) and a $2 billion stake from the chipmaking giant. Roth MKM’s five-star analyst Sujeeva De Silva said the deal supports “expectations of continued strong growth” at Marvell.
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Trade COHR with leverageWhat the Partnership Entails
Under the partnership, Nvidia plans to make its hardware, including its NVLink Fusion rack-scale interconnect platform, compatible with Marvell’s custom AI chips. This offers customers the ability to develop semi-custom AI infrastructure using both companies’ technology.
The deal also includes a collaboration on telecommunications. Both companies plan to work together to develop hardware for AI-capable telco network platforms powered by Nvidia’s Aerial AI-RAN software for current 5G and future 6G systems.
Marvell’s Nvidia Deal Creates ‘Revenue Visibility’
De Silva believes that the partnerships show Marvell’s business of providing core AI infrastructure is getting attention from a diverse range of hyperscale customers. The analyst reaffirmed his Buy rating on MRVL stock and lifted his price target by 43%, from $94.59 to $135, implying about 4% downside risk.
Chipping in, Stifel analyst Tore Svanberg also praised the deal as expanding Marvell’s total addressable market and “likely provides long-term revenue visibility in the custom application-specific integrated circuit (ASIC) and optical segments.” Svanberg maintained his Buy rating for MRVL, assigning a price target of $120 that implies about 21% upside.
‘Vote of Confidence’
Similarly, Oppenheimer’s Rick Schafer said the new deal marks a “vote of confidence” in Marvell as a core AI partnership in ASIC and connectivity. Schafer pointed to Nvidia’s other recent investments to buttress his point: $2 billion each in AI cloud infrastructure company Nebius (NBIS), photonics maker Lumentum (LITE) and Coherent (COHR), and electronic design automation firm Synopsys (SNPS).
The five-star analyst reaffirmed his Buy rating on both Nvidia and Marvell.
Is Marvell a Good Stock to Buy?
Across Wall Street, analysts remain highly bullish on Marvell’s shares and have a Strong Buy rating on the stock. This is based on 22 Buys and five Holds issued over the past three months.
In addition, the average MRVL price target of $120.90 implies about 22% upside from current trading levels.
