Marvell Technology (MRVL) shares rallied in early trading Monday following reports of a strategic partnership with Alphabet (GOOGL) to co-develop two new AI chips. The deal solidifies Marvell’s role as a vital hardware partner for tech giants like Nvidia (NVDA) in the race to build faster AI infrastructure. Notably, the stock has gained 65% year-to-date.
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The proposed deal involves Marvell designing two specific types of chips for Google. The first is a memory unit meant to speed up data movement, while the second is a new version of Google’s Tensor Processing Unit (TPU) built specifically for real-time AI applications. These chips are meant to work side by side, with each one handling a different part of the task.
If finalized, the deal would strengthen Marvell’s position against rivals like Broadcom (AVGO), showing its ability to build custom chips that power large-scale AI infrastructure.
Nvidia Tie-Up Adds to Momentum
Marvell’s recent strength is also supported by its close partnership with Nvidia (NVDA). Last month, Nvidia took a $2 billion stake in the company and signed a deal to better align their hardware.
Analysts see this as a key boost. It allows Marvell to sell more of its optical hardware and custom chips (ASICs) to companies using Nvidia’s GPUs. As Nvidia expands, Marvell stands to benefit alongside it.
Following the deal, several analysts raised their price targets. Bank of America analyst Vivek Arya lifted his target to $125 from $110, calling it a strategic win. He noted that the partnership strengthens Marvell’s role in connectivity technologies and deepens its ties with Nvidia across AI systems.
Is Marvell a Good Stock to Buy Now?
Even with the stock’s strong rally this year, top analysts continue to raise their price targets:
- Oppenheimer: Five-star analyst Rick Schafer recently boosted his price target to $170, citing a very bullish growth outlook after meeting with management.
- B. Riley: Another 5-star analyst Craig Ellis pointed to strong sales data from chip-foundry giant TSMC (TSM) as a sign that demand for Marvell’s networking tools and AI-driven products remains solid.
On TipRanks, Marvell holds a Strong Buy consensus rating. While some worry about the stock being “stretched,” most experts believe Marvell’s role in connecting AI data centers makes it a must-own name in the semiconductor space. The average MRVL price target of $126.12 implies about 9% downside potential from current levels.
