Analysts upgrade TD Cowen, lift price targets after AI-focused analyst day

Marvell Technology impressed Wall Street analysts with its AI-focused analyst day, leading to an upgrade of the stock and a significant increase in price targets. The chipmaker announced a much larger long-term revenue outlook, raising its fiscal 2028 revenue projection to $20 billion from $18 billion. Moreover, Marvell introduced a fiscal 2031 framework ranging from $70 billion to $90 billion, or $80 billion at the midpoint, which is approximately 10 times the level of fiscal 2026. This bold forecast positions the company at roughly 10 times its current valuation.

Analyst Sean O'Loughlin at TD Cowen upgraded the stock from a 'Hold' rating to 'Buy' and set a new target price of $350 per share. O'Loughlin pointed out that the company's growth drivers have fully shifted to its connectivity franchise, and the concentration risk tied to custom chips has been largely mitigated. He noted that custom accelerators now make up about 19% of the 2030 target, down from over 40% in previous expectations.

O'Loughlin acknowledged that TD Cowen's downgrade a year ago was inaccurate, particularly regarding the connectivity segment.

Other analysts at Jefferies and B. Riley raised their price targets and reiterated optimistic earnings projections. Jefferies raised its target to $450, calling the $30 of earnings per share by 2030 conservative, with potential for $35 to $40 depending on the revenue mix. B. Riley upgraded its target to $365, emphasizing that the 2030 sales and earnings targets are 73% and 67% above consensus, respectively.

The brokerage highlights the company's model is built on more than 100 active projects, none of which are disproportionate contributors. However, analysts cautioned about potential risks such as political resistance to data centers and supply constraints, although Marvell stated it has secured the necessary supply.

Stifel increased its target to $370, maintaining that the targets are built bottom-up without relying on a single 'mega socket' driver. Susquehanna raised its target to $340, rating the stock as 'Positive'. They noted that operational expenses (opex) should grow at half the pace of revenue through fiscal 2031. Susquehanna's analysts concluded that Marvell expects scaling up switching and optics to evolve into multibillion-dollar businesses.