Here’s Why Marvell Could See Higher Highs

Marvell Technology (MRVL) could eventually see higher highs.

Granted, the stock is now technically overbought and could see some profit-taking.  Longer-term, it could race to higher highs.  All thanks to the artificial intelligence story.

“AI has emerged as a key growth driver for Marvell, which we are enabling with our leading network connectivity products and emerging cloud-optimized silicon platform,” said Chief Executive Matt Murphy. “While we are still in the early stages of our AI ramp, we are forecasting our AI revenue in fiscal 2024 to at least double from the prior year and continue to grow rapidly in the coming years.”

Even better, the company expects for its AI chip business to grow from $200 billion, or 3% of sales to more than $800 billion, or about 15% of sales by 2024. According to a managing director at Mizuho Securities, Jordan Klein, as quoted by Investors’ Business Daily, “Investors all around are starved for new generative AI-related ideas no matter how big or small the actual revenue impact (is) expected to be in (the) next year. The concept and idea of AI-related demand and growth is all it takes in this market to pull in real buyers.”

Other analysts like MRVL here, too.

Needham just raised its price target to $70 from $60. Raymond James raised from $50 to $64. Craig-Hallum raised from $56 to $67. Morgan Stanley raised from $45 to $55.  Wells Fargo raised from $54 to 65.  Even analysts at TD Cowen, Susquehanna, Stifel, Bank of America, Barclays, KeyBanc, and Deutsche Bank raised their price targets.

For us, we believe MRVL could see near-term profit-taking after a significant run higher.  Longer-term, we’d like to see it closer to $80 a share.