Marvell Technology: Celestial AI Acquisition Unlocks Long-Term Photonics-Driven Growth Despite Near-Term EPS Pressure

Quinn Bolton, an analyst from Needham, maintained the Buy rating on Marvell. The associated price target was lowered to $118.00.

Quinn Bolton has given his Buy rating due to a combination of factors tied to Marvell’s strategic acquisition of Celestial AI and the long-term earnings power it unlocks. He views Celestial AI’s photonic fabric technology as a key enabler for next‑generation optical interconnects at scale, positioning Marvell to benefit from accelerating demand in advanced data center and AI infrastructure. Although the integration of Celestial AI introduces higher operating expenses through FY27 and early FY28, Bolton believes the resulting pressure on near‑term earnings is manageable relative to the growth opportunity being created.

Bolton’s updated model incorporates a meaningful revenue ramp from Celestial AI, with contributions beginning in the second half of FY28, exiting that year at an annualized revenue rate of roughly $500 million, and potentially doubling to about $1 billion on an annualized basis by the fourth quarter of FY29. Despite trimming his EPS forecasts to reflect the added costs ahead of that revenue, he still projects robust earnings growth over his forecast horizon. Based on these revised estimates, he raises his 12‑month price target to $118, applying an approximately 25x P/E multiple to his new CY27/FY28 non‑GAAP EPS forecast, which supports maintaining a Buy rating on the shares.

In another report released today, UBS also maintained a Buy rating on the stock with a $115.00 price target.