MRVL Stock Drops After Best Session In A Month: TD Cowen Flips Marvell To ‘Buy,’ Sees XPU Risk ‘Largely De-Risked’

• TD Cowen believes Marvell’s growth is increasingly supported by its connectivity franchise.
• It added that the concentration risk tied to Marvell’s custom XPU programs has been largely de-risked.
• The firm upgraded MRVL to ‘Buy’ from ‘Hold’ and raised its price target to $350 from $245, implying more than 20% upside.

Marvell Technology (MRVL) shares pulled back in early morning trade Wednesday after their strongest session in more than a month, following an Investor Day outlook that prompted TD Cowen to upgrade the stock and raise its price target.

TD Cowen analyst Sean O'Loughlin upgraded Marvell to ‘Buy’ from ‘Hold’ with a price target of $350, up from $245. The new target implies more than 20% upside from recent levels.

In a note to investors cited by TheFly, analyst Sean O'Loughlin said Marvell’s growth drivers have shifted toward its “strong” connectivity franchise and that concentration risk tied to custom XPU programs has been largely de-risked.

MRVL stock fell around 1.6% in pre-market trade, among broader weakness in the market, and was among the top trending tickers on Stocktwits at the time of writing. The shares gained over 5% in the previous session on the company forecasting that its custom AI chips would become a roughly $30 billion business by fiscal 2031.

Marvell Sets $70B To $90B Revenue Target

At its Investor Day on Tuesday, Marvell set a fiscal 2031 revenue target of $70 billion to $90 billion, a substantial increase from the $8.2 billion it generated in fiscal 2026, which ended in January.

At the midpoint, management expects roughly $37.5 billion from interconnect products and $30 billion from custom products. The company also raised its fiscal 2028 revenue outlook to approximately $20 billion, above the $18.2 billion Wall Street consensus, as per Koyfin. 

Marvell generated about $1.5 billion in custom revenue in fiscal 2026. Its target of more than $12 billion in fiscal 2029 therefore represents a substantial increase, up from its previous goal of more than $10 billion.

Management said the forecast does not depend on winning a major new customer or landing a "home-run" design win.

TD Cowen Sees Lower Customer Concentration Risk

Concentration risk has been a concern because custom-chip programs can depend heavily on a small number of large cloud customers.

Marvell has been expanding its relationships with hyperscalers, including through its work on Amazon’s (AMZN) Trainium and Microsoft’s (MSFT) Maia chips. It has also reportedly secured a portion of next-generation Google TPU work.

Broadcom (AVGO) remains a major competitor in custom AI silicon, with its business anchored by relationships with Google and Meta Platforms (META). Meanwhile, Nvidia (NVDA) continues to dominate AI computing with its GPUs, while custom chips offer cloud providers an alternative for workloads where specialized designs can improve cost or efficiency.

Analysts Raise Marvell Price Targets

TD Cowen was not the only firm to become more bullish following Marvell’s Investor Day. Jefferies raised its price target to $450 from $325, while Evercore ISI increased its target to $433 from $275. Morningstar lifted its fair value estimate to $360 from $300.

According to Koyfin data, the average 12-month price target on MRVL stock stands at $305.46, implying approximately 6.4% upside. Of the 46 analysts covering the stock, 40 rated it ‘Buy’ or ‘Strong Buy’, while the remaining six recommended ‘Hold’.

How Is Retail Feeling About MRVL Stock?

On Stockwits, retail sentiment around MRVL stock flipped to ‘bullish’ from ‘bearish’ over the past day.

Some retail investors attributed the share price drop to profit booking.

Others were bullish enough to say that Marvell could be the next $1 trillion dollar company. Its current market cap stands at around $250 billion.

MRVL stock has gained approximately 237% year to date and 222% over the past 12 months.

Read also: Nvidia Gets Another AI Demand Signal As Foxconn Sales Hit Record High – Apple Faces Holiday Test

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