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While Broadcom and Qualcomm shares have returned 14.2% and 3.8%, respectively, shares of Ambarella have lost 11.4% in the same time frame. This steep decline in the share price of this semiconductor leader raises the question: Should investors hold on or exit the stock to minimize losses?
Although Marvell is experiencing a massive traction in its AI-focused custom silicon semiconductor business, the margin in this business is fundamentally lower, further affecting MRVL’s total gross margin.
Marvell Technology’s custom AI silicon, including XPUs, which are driving its revenue growth, is lowering MRVL’s gross margins due to higher costs associated with manufacturing these chips.
The ongoing macroeconomic uncertainties, like the U.S. government’s evolving stance toward China, from where MRVL gained about 43% of its fiscal 2025 total revenues, are also a concern for the company.
Investors’ skepticism has also been intensified by the fear of sanctions and persistent tariff threats to China, where Marvell Technology owns research and development facilities.
Weakness in MRVL’s consumer end market due to volatility in gaming demand and lumpy order patterns in industrial business has added to investor concerns. However, not everything is gloom and doom for MRVL stock.
Marvell’s Product Innovations Make the Stock a Long-Term Player
Marvell is experiencing massive traction across its product portfolio, which includes custom Application Specific Integrated Circuits, Custom high bandwidth memory Compute Architecture, Co-Packaged Optics Platform and Multi-Die Packaging Platform, driven mainly by proliferation in AI and high performance computing among data centers and hyperscalers.
As data centers process more AI-related tasks, they need to improve on networking, interconnect, processing and storage capabilities, requiring high performance semiconductor solutions. Marvell Technology can seize this opportunity and capitalize on this trend with its 800G PAM, 400ZR DCI, and 1.6T PAM digital signal processing products.
This is evident in Marvell Technology’s data center segment, which has taken the lead among all its segments with 76% year-over-year revenue growth in the first quarter of fiscal 2026.
Marvell Technology also plans to expand its customer base among hyperscaler customers that seek to stand out, cut expenses and want to gain more control over their AI infrastructure. Marvell has collaborated with NVIDIA and leveraged the latter's NVLink Fusion platform to build comprehensive rack-scale AI solutions to meet the needs of hyperscalers.
Furthermore, the shift from copper to optical connectivity in AI infrastructure represents a massive growth opportunity for Marvell Technology’s Co-Packaged Optics technology. Marvell Technology is also experiencing a recovery among its enterprise networking and carrier infrastructure segments on the back of the demand rebound.
With all these factors at play, the Zacks Consensus Estimate for Marvell Technology’s 2026 revenues is pegged at $8.2 billion, indicating year-over-year growth of 42.6%. The consensus mark for earnings is pegged at $2.79 per share, suggesting a whopping 77.71% year-over-year increase.
Image Source: Zacks Investment Research
MRVL’s Favorable Valuation Multiple
The price drop in stock price has brought Marvell Technology to a forward 12-month price-to-sales (P/S) multiple of 7.43x, significantly below its one-year median of 9.54x as well as the Zacks Electronics – Semiconductors industry’s average of 8.5x.
MRVL stock is also trading at a discounted valuation compared to Broadcom. AVGO's forward 12-month P/S ratio of 17.51x, while Qualcomm trades at 3.98x and Ambarella at 7.43x.
Marvell Forward 12 Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: Hold MRVL Stock for Now
Marvell Technology is facing several headwinds, including geopolitical tension, shrunken margins and growing competition across its end markets. However, the company has strong long-term fundamentals supported by its strong foothold in the data center and high-speed networking market.
Image: Bigstock
Marvell Technology Slips 30% YTD: Should You Hold or Fold the Stock?
Key Takeaways
Marvell Technology (MRVL - Free Report) shares have plunged 31% year to date, underperforming the Zacks Electronics - Semiconductors industry and its peers, including Broadcom (AVGO - Free Report) , Qualcomm (QCOM - Free Report) and Ambarella (AMBA - Free Report) .
While Broadcom and Qualcomm shares have returned 14.2% and 3.8%, respectively, shares of Ambarella have lost 11.4% in the same time frame. This steep decline in the share price of this semiconductor leader raises the question: Should investors hold on or exit the stock to minimize losses?
YTD Performance Chart
Image Source: Zacks Investment Research
Key Reasons Behind MRVL’s Subdued Stock Performance
Although Marvell is experiencing a massive traction in its AI-focused custom silicon semiconductor business, the margin in this business is fundamentally lower, further affecting MRVL’s total gross margin.
Marvell Technology’s custom AI silicon, including XPUs, which are driving its revenue growth, is lowering MRVL’s gross margins due to higher costs associated with manufacturing these chips.
The ongoing macroeconomic uncertainties, like the U.S. government’s evolving stance toward China, from where MRVL gained about 43% of its fiscal 2025 total revenues, are also a concern for the company.
Investors’ skepticism has also been intensified by the fear of sanctions and persistent tariff threats to China, where Marvell Technology owns research and development facilities.
Weakness in MRVL’s consumer end market due to volatility in gaming demand and lumpy order patterns in industrial business has added to investor concerns. However, not everything is gloom and doom for MRVL stock.
Marvell’s Product Innovations Make the Stock a Long-Term Player
Marvell is experiencing massive traction across its product portfolio, which includes custom Application Specific Integrated Circuits, Custom high bandwidth memory Compute Architecture, Co-Packaged Optics Platform and Multi-Die Packaging Platform, driven mainly by proliferation in AI and high performance computing among data centers and hyperscalers.
As data centers process more AI-related tasks, they need to improve on networking, interconnect, processing and storage capabilities, requiring high performance semiconductor solutions. Marvell Technology can seize this opportunity and capitalize on this trend with its 800G PAM, 400ZR DCI, and 1.6T PAM digital signal processing products.
This is evident in Marvell Technology’s data center segment, which has taken the lead among all its segments with 76% year-over-year revenue growth in the first quarter of fiscal 2026.
Marvell Technology also plans to expand its customer base among hyperscaler customers that seek to stand out, cut expenses and want to gain more control over their AI infrastructure. Marvell has collaborated with NVIDIA and leveraged the latter's NVLink Fusion platform to build comprehensive rack-scale AI solutions to meet the needs of hyperscalers.
Furthermore, the shift from copper to optical connectivity in AI infrastructure represents a massive growth opportunity for Marvell Technology’s Co-Packaged Optics technology. Marvell Technology is also experiencing a recovery among its enterprise networking and carrier infrastructure segments on the back of the demand rebound.
With all these factors at play, the Zacks Consensus Estimate for Marvell Technology’s 2026 revenues is pegged at $8.2 billion, indicating year-over-year growth of 42.6%. The consensus mark for earnings is pegged at $2.79 per share, suggesting a whopping 77.71% year-over-year increase.
Image Source: Zacks Investment Research
MRVL’s Favorable Valuation Multiple
The price drop in stock price has brought Marvell Technology to a forward 12-month price-to-sales (P/S) multiple of 7.43x, significantly below its one-year median of 9.54x as well as the Zacks Electronics – Semiconductors industry’s average of 8.5x.
MRVL stock is also trading at a discounted valuation compared to Broadcom. AVGO's forward 12-month P/S ratio of 17.51x, while Qualcomm trades at 3.98x and Ambarella at 7.43x.
Marvell Forward 12 Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: Hold MRVL Stock for Now
Marvell Technology is facing several headwinds, including geopolitical tension, shrunken margins and growing competition across its end markets. However, the company has strong long-term fundamentals supported by its strong foothold in the data center and high-speed networking market.
Considering all these factors, we suggest that investors should retain this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.