Marvell Earnings: Strong Guidance and AI Upside Match Our Bullish Long-Term Thesis

We maintain our $75 per share fair value estimate for shares of narrow-moat Marvell Technology after strong July-quarter results and October-quarter guidance aligned with our thesis. We continue to see Marvell as a significant winner from artificial intelligence investment with its optical and custom accelerator chip portfolios. Management expects upside to the firm’s AI revenue targets given in April, which agrees with our bullish estimates. We also liked guidance for growth from Marvell’s non-AI markets, which appear to be past their cyclical troughs. Shares rose 9% in after-hours trading on impressive guidance that met our above-consensus model, and we now see the stock as fairly valued.