Marvell’s Big Earnings Win Could Be the Start of Something Bigger

Key Points

• Marvell popped sharply after earnings, as the report delivered a clear beat-and-raise and improved visibility into near-term demand.
• The quarter came in ahead of expectations, but the bigger takeaway was a meaningful lift to the company’s multi-year outlook, reinforcing momentum in custom silicon.
• The update also helped shift Street sentiment, including a notable skeptic turning more constructive on the stock.

In terms of custom silicon, Marvell Technology NASDAQ: MRVL is often seen as playing second fiddle to its much larger semiconductor peer Broadcom NASDAQ: AVGO. However, recently, Marvell has clearly been the better performer of these two. Over the past six months, Marvell’s total return sits north of 30%, while Broadcom’s comes in at less than 5%.

Contributing significantly to Marvell’s outperformance was its latest earnings release, which led shares to gain over 18% afterward.

Marvell’s beat-and-raise release not only provided clarity around the company’s outlook but also signaled good things to come for the overall custom silicon market.

Marvell Posts Beats, Significantly Upgrades Two-Year Guidance

In its Q4 fiscal year 2026 (FY2026), Marvell posted revenue of $2.22 billion, or a growth rate of 22% year-over-year (YOY). Note that Marvell’s fiscal reporting period is several quarters ahead of the calendar period. Marvell’s revenue just slightly beat expectations of $2.21 billion.

The firm also saw its adjusted earnings per share (EPS) increase by 33% to 80 cents, demonstrating significant operating leverage in its business. This surpassed estimates of 79 cents. The company’s data center end market was its primary growth driver in the full year FY2026, with sales rising nearly 47% YOY. This exceeded the firm’s overall growth rate of 42%. Data centers accounted for 74% of revenue for both the full year and the latest quarter.

However, the most impactful news was what Marvell expects going forward. In its FY2027, Marvell expects revenue to approach $11 billion, equating to a growth rate of more than 30% YOY. Since Marvell’s last earnings call, cloud capital expenditure expectations have continued rising.

Thus, the company now expects to generate 40% YOY growth in its data center end market. This is greatly above the 25% YOY data center growth rate the firm outlined for FY2027 in its previous earnings call. This marks the second quarter in a row that Marvell has raised its data center growth expectations for FY2027.

In September of 2025, Marvell had indexed this growth to just 18%. In more than doubling its growth outlook in less than six months, Marvell is clearly experiencing big-time momentum in the most important part of its business.

Marvell even updated its outlook for FY2028, now projecting total revenue to grow by 40% YOY to around $15 billion. This is $2 billion higher than the outlook Marvell provided three months ago. Furthermore, Marvell expects to generate adjusted EPS of "well over" $5 in FY2028. Using $5 as a baseline, Marvell is projecting adjusted EPS to grow at an impressive compound annual rate of at least 33% over the next two years. Even after Marvell’s extensive post-earnings gain, this bodes well for the stock’s outlook.

Marvell and Broadcom Align: Custom Chip Development Is on the Rise

In a positive sign for the overall custom chip market, Marvell executives echoed statements made by Broadcom CEO Hock Tan. During the call, Marvell CEO Matt Murphy said, “We are seeing an unprecedented level of activity across multiple new engagements as hyperscalers increase their cadence of custom chip development.” Murphy noted that custom chips are “proliferating across the hyperscale ecosystem” as inference-optimized hardware becomes increasingly important.

Hock Tan expressed a similar sentiment in Broadcom’s earnings call as it relates to the trend of custom chip development. Tan said that the majority of its custom chip buyers are moving toward developing two chips a year simultaneously.

This comes as hyperscalers and LLM developers are increasingly looking to monetize their AI models, requiring more inference. Improved training chips enable companies to build more intelligent models, while improved inference chips enable them to monetize those models efficiently. However, if companies train the best model without optimized inference chips in place, they risk losing their advantage as another competitor may train a better model by the time they are ready to monetize.

Overall, it's good to see that the top two players in custom chip design are seeing the same things. Increased custom chip development is clearly a positive sign for both Marvell and Broadcom.

MRVL Wins Over Key Skeptic, Robust Guidance Supports Outlook

Marvell continued to express confidence in the relationship with its leading custom chip buyer, Amazon.com NASDAQ: AMZN. The company upgraded its revenue growth forecast in FY2027 from this partnership to 20%. It sees further growth in FY2028 and remains deeply engaged in competing for the next generation of this program.

Notably, Marvell’s latest report seems to have swayed the opinion of Benchmark analyst Cody Acree. Acree was one of the most outspoken skeptics of Marvell’s relationship with Amazon. He downgraded the stock to a Buy from a Hold in December of 2025.

Now, Acree has flipped, upgrading Marvell to a Buy and placing a $130 price target on the stock, steeply above its current price near $90.

Overall, Marvell’s valuation is considerably more demanding after the company’s post-earnings surge. Still, the stock trades at a forward price-to-earnings (P/E) ratio of 24x, just slightly below its average near 24.5x over the past 52 weeks. Given the company’s impressive guidance update and the momentum in custom chip design, the future still looks bright.