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Marvell Technology (MRVL) stock surged almost 6% on Friday after Amazon (AMZN) disclosed explosive growth in its Trainium processor business, which Marvell manufactures exclusively. Amazon CEO Andy Jassy revealed that Trainium2 became a multibillion-dollar business, growing 150% quarter-over-quarter, with the chip now fully subscribed by customers. The partnership positions Marvell at the center of Amazon's artificial intelligence infrastructure buildout. Amazon's Project Rainier supercomputer has gone live, featuring nearly 500,000 Trainium2 chips, with plans to deploy over one million chips by year-end. Trainium3, scheduled for customer preview in late 2025 with volume production in 2026, ensures Marvell maintains a secure manufacturing pipeline extending well into next year. J.P. Morgan analyst Harlan Sur reaffirmed an “Overweight” rating on MRVL stock, accompanied by a $120 price target. Sur highlighted Marvell's strategic positioning as cloud providers accelerate AI spending. Amazon's capital expenditure forecast for 2025 rose to $125 billion, above its initial guidance of $118.5 billion. This spending surge benefits Marvell's custom ASIC business and its optical connectivity products acquired through the 2021 Inphi acquisition. Sur projects Marvell's custom ASIC segment will grow 18% to 20% in 2026, supported by continued Amazon collaboration on next-generation 2nm Trainium4 technology. The analyst's thesis centers on Marvell's transformation into a leader for optical connectivity and custom AI silicon that powers hyperscale cloud networks. Despite Friday's gains, Marvell stock is down 17% year-to-date (YTD), trailing the broader markets by a wide margin. Let’s see if you should buy, sell, or hold MRVL stock right now. Marvell’s AI Ecosystem Continues to Expand Marvell Technologies CEO Matt Murphy delivered compelling insights during recent investor conferences, underscoring the company's dominant position in artificial intelligence infrastructure. The semiconductor manufacturer has transformed from a diversified chip maker into an AI powerhouse, with data center business now comprising 75% of total revenue, up from just 34% two years ago. The company's electro-optics business is flying under the radar. Marvell acquired Inphi in 2021, a business that has grown from $600 million to $3 billion in revenue. Murphy emphasized that this business alone deserves premium valuation multiples given its market leadership and growth trajectory. Beyond the headline Amazon Trainium wins, Marvell has quietly accumulated over 20 multigenerational custom design wins spanning both XPU processors and XPU attach products. These wins collectively represent more than $75 billion in lifetime revenue potential. Scale-up networking represents another significant opportunity where Marvell can benefit from unique advantages. The company combines low-latency switching intellectual property acquired through Innovium with proprietary SerDes technology and deep customer relationships across multiple XPU programs. This positions Marvell to capture a significant share as AI systems evolve toward rack-scale architectures that require ultra-low latency connectivity. Murphy addressed investor concerns about customer concentration by emphasizing the diversification underway. The initial handful of design wins ramping in 2024 will expand to 18-plus programs launching over the next 18 to 24 months across traditional hyperscalers and emerging cloud providers. This growing diversity of sockets will smooth revenue patterns and reduce dependency on any single customer program. Marvell’s switching business showcases Marvell's execution capabilities. What started as a $150 million baseline when acquiring Innovium has already doubled, with management projecting the potential to triple that figure as 51.2 terabit products ramp up in production. The switching portfolio also serves as a foundation technology for scale-up opportunities that could drive substantial incremental growth. Marvell's financial performance validates the strategy, with operating margins expanding 870 basis points year-over-year (YoY) to 34.8%. At the same time, earnings per share grew 123% in fiscal Q2, more than double the revenue growth rate, indicating significant operating leverage. What is the MRVL Stock Price Target? Analysts tracking MRVL stock forecast revenue to increase from $5.77 billion in fiscal 2025 (ended in January) to $16 billion in fiscal 2030. During this period, adjusted earnings are expected to increase from $1.57 per share to $6.94 per share. Today, MRVL stock trades at a forward earnings multiple of 30.6x, which is higher than its 10-year average of 27x. If the tech stock reverts to its historical average, it could surge 100% within the next four years. Out of the 34 analysts covering MRVL stock, 22 recommend “Strong Buy,” two recommend “Moderate Buy,” and 10 recommend “Hold.” The average MRVL stock price target is $90.78, just slightly above the current price of $90.31.
