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Marvell Technology Plunges 17% in a Year: Hold or Fold the Stock?

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Marvell Technology, Inc. (MRVL - Free Report) shares have been extremely volatile and have lost 17.3% in the past year, underperforming the Zacks Electronics - Semiconductors industry’s growth of 11.5%.

Marvell Technology One-Year Price Performance Chart

Zacks Investment Research
Image Source: Zacks Investment Research

The decline in the share price of this semiconductor leader raises the question: Should investors hold the stock or book a loss?

What Has Dragged MRVL Stock Down?

Marvell Technology’s decline can be attributed to a mix of broader market weakness. A widespread sell-off in tech stocks, triggered by fears of rising trade tensions. The U.S. government’s recent steps toward China have also been a matter of concern for Marvell Technology, as the company generates significant revenues (about 43% of its fiscal 2025 total revenues) from the Chinese market.

Furthermore, as Marvell Technology owns research and development facilities in China and outsources to China, the growing geopolitical tension, fear of fresh sanctions and persistent tariff threats have added to investors’ skepticism. However, given the MRVL’s strong fundamentals, investors’ concerns seem overblown.

Growing Data Center and Networking Market Aids MRVL

Marvell Technology is benefiting from hyperscalers’ ramping up their use of custom silicon for AI workloads. In fiscal 2025, MRVL’s artificial intelligence (AI)-based revenues crossed its $1.5 billion target, and Marvell expects to “very significantly” surpass its $2.5 billion AI revenue target in fiscal 2026.

Marvell Technology’s custom AI silicon and electro-optics solutions have enabled it to become a leading player in the high-performance computing space. MRVL’s collaboration with the largest hyperscalers ensures sustained growth. Marvell Technology’s management is confident that revenues from its custom XPU (accelerated computing) solutions will continue expanding in fiscal 2027 and beyond.

Moreover, as AI workloads grow, data centers need enhanced networking and interconnect products. MRVL is capitalizing on this shift with its high-speed optical interconnects, including 800G PAM, 400ZR DCI, and its industry-first 1.6T PAM DSP (digital signal processor), which cuts down on optical module power usage by 20%.

Furthermore, the shift from copper to optical connectivity in AI infrastructure represents a massive growth opportunity for the company. MRVL’s Co-Packaged Optics technology and its development of the industry's first 2nm silicon IP for cloud and AI workloads solidify its position in the next-generation networking space.

Based on all these factors, the Zacks Consensus Estimate for Marvell Technology’s 2026 revenues is pegged at $8.3 billion, indicating year-over-year growth of 43.8%. The consensus mark for earnings is pegged at $2.76 per share, suggesting a whopping 75.8% year-over-year increase.

Marvell Technology beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 4.3%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Marvell Technology, Inc. Price, Consensus and EPS Surprise

Marvell Technology, Inc. Price, Consensus and EPS Surprise

Marvell Technology, Inc. price-consensus-eps-surprise-chart | Marvell Technology, Inc. Quote

Marvell’s Collaborations to Boost Growth

Marvell Technology has formed strong collaborations with industry leaders, including NVIDIA (NVDA - Free Report) , Juniper Networks (JNPR - Free Report) and Coherent Corp. (COHR - Free Report) , to design high-speed networking technology for AI workloads.

Marvell and NVIDIA have collaborated to integrate MRVL’s optical interconnect solutions with NVDA’s AI and computing technology. Using the NVIDIA HGX H100 eight-GPU platform, BlueField-3 DPUs, Spectrum-X networking, and Marvell Technology’s interconnects, they have developed NVIDIA Israel-1 to power AI applications with high efficiency.

Marvell Technology has collaborated with Juniper Networks and Coherent Corp. to develop 800ZR networking solutions. Together, these companies combined Juniper’s PTX10002-36QDD Packet Transport Router, Coherent’s 800ZR transceiver, and Marvell’s Orion 800G coherent DSP to develop a networking solution to support AI, cloud, and 5G.

MRVL’s Attractive Valuation

The drop in stock price has brought Marvell Technology to a forward 12-month price-to-sales (P/S) multiple of 5.59X, significantly below its one-year median of 10.16X as well as the Zacks Electronics – Semiconductors industry’s average of 6.81X. This valuation discount makes MRVL an appealing investment choice for investors looking for exposure to AI and high-performance computing at a more reasonable price.

Marvell 12 Months (P/S) Valuation Chart

Zacks Investment Research
Image Source: Zacks Investment Research

Conclusion: Hold MRVL Stock for Now

While Marvell Technology is facing some near-term headwinds, including U.S.-China tension and the United States’ new tariff policies raising costs for MRVL, the company has strong fundamentals supported by its strong foothold in the data center and high-speed networking market.

As AI adoption accelerates, Marvell Technology’s growth trajectory remains intact, making the stock worth retaining at its current valuation. MRVL carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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