Key Takeaways:
- UBS raised Marvell Technology's price target to $340 from $230, implying 39% upside
- The Teralynx T100 switch chip and CXL market exposure drove the upgrade
- Marvell expects its custom-chip business to exceed $10 billion by fiscal 2029
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UBS lifts Marvell Technology target to $340 on AI chip demand
UBS analyst Timothy Arcuri raised Marvell Technology Inc.'s price target to $340 from $230, implying a 39% upside from the current $245.29.
"Marvell's Teralynx T100 switch silicon and growing exposure to the CXL interconnect market represent underappreciated growth drivers," Arcuri, who reiterated a Buy rating, said.
The new $340 target comes after Marvell in June launched the Teralynx T100, a 102.4 Tbps switch chip built on 3nm process technology for AI data centers. UBS estimates the global CXL market will reach about $45 billion by 2027 and expand to $70 billion to $100 billion by 2030, with Marvell generating roughly $1 billion in CXL-related revenue by 2027.
The upgrade counters a recent selloff that erased about $23.4 billion in market value on July 2, when shares dropped 9.84% to $245.29. The stock has fallen roughly 20% since joining the S&P 500 on June 22.
Marvell reported first-quarter fiscal 2027 revenue of $2.418 billion on May 27, up 28% from a year earlier, with data center revenue making up 75.7% of total sales. The company guided second-quarter revenue to about $2.7 billion. Chief Executive Officer Matt Murphy said Marvell now expects its custom-chip business to exceed $10 billion in fiscal 2029 and raised its 2028 revenue outlook to roughly $16.5 billion from $15 billion.
The Teralynx T100, sampling to customers this quarter, consumes under 1,000 watts — up to 25% less power than competing products — and supports a 512-port radix for scale-out deployments. Marvell also partnered with Nvidia Corp. in March on NVLink Fusion, with Nvidia investing $2 billion in the company.
The UBS upgrade signals that Wall Street sees Marvell's AI networking and custom silicon bets as multiyear revenue drivers. Investors will watch the company's second-quarter earnings report, expected in late August, for updates on Teralynx T100 customer adoption and CXL design wins.
This article is for informational purposes only and does not constitute investment advice.
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