Key Points
Marvell Technology is poised to deliver a massive acceleration in revenue and earnings growth over the next five years.
The stock may seem expensive at first, but it can justify its valuation due to the lucrative AI infrastructure market it serves.
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Marvell Technology (NASDAQ: MRVL) has made investors significantly richer over the past year.
Shares of the chip designer have surged nearly 229% during this period, as investors have been buying the stock hand over fist to capitalize on the growing demand for custom artificial intelligence (AI) processors and networking components. So, a $5,000 investment made in this semiconductor stock a year ago is now worth almost $16,500.
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Importantly, the AI-focused end markets that Marvell serves are poised for incredible growth until the end of the decade. Let’s take a look at the company’s catalysts and gauge how much more upside Marvell could deliver by 2030.
Image source: The Motley Fool.
These catalysts will ensure terrific growth for Marvell Technology
Marvell designs custom AI chips, networking components, and storage controllers. These components are playing a central role in AI data center infrastructure.
Hyperscalers and AI labs have been designing custom in-house chips to lower the operating costs of data centers, while also using networking components to help connect data centers and chip clusters to transport huge data sets quickly. The company has notable hyperscaler customers, including Google, which recently signed a six-year, $120 billion contract with Marvell.
Marvell noted on its latest earnings call that the Google contract could add $18 billion a year to its revenue. That’s sizable considering that the company has generated $9.45 billion in revenue over the trailing twelve months. Also, Marvell supplies its components for Amazon‘s AI data centers and is expected to start ramping up shipments of custom processors to Microsoft from 2027, according to Bank of America analyst Vivek Arya.
Arya estimates that the total addressable opportunity in custom AI chips and networking components could reach $300 billion in 2030. Marvell itself could generate $30 billion in custom chip revenue by the end of the decade, according to Bank of America.
So, it is easy to see why Marvell is poised to clock healthy revenue growth over the next three years, compared to the $8.2 billion revenue it generated in fiscal 2026 (which ended on Jan. 31).
Data by YCharts
Should investors be concerned about the valuation?
Marvell stock’s terrific surge over the past year has brought its price-to-earnings (P/E) ratio to 81. The forward P/E ratio of 58 isn’t cheap either. However, the iShares Semiconductor ETF has a P/E ratio of 62, suggesting that Marvell isn’t all that expensive when its impressive growth prospects are considered.
Marvell’s earnings per share landed at $2.84 in fiscal 2026. The following chart tells us that its bottom line is poised to grow at a solid pace over the next three years.
Data by YCharts
The fiscal 2029 earnings estimate of $10.41 per share suggests that Marvell’s earnings will increase at a compound annual growth rate (CAGR) of 54%. Assuming it clocks another 50% increase in earnings over the next two fiscal years, its earnings per share could reach $23.42 in fiscal 2031 (which will coincide with most of calendar 2030).
If Marvell trades at even 30 times earnings at that time, a major discount to the semiconductor sector, its stock could jump to $703. That’s nearly triple Marvell’s current stock price, indicating that it can turn a $5,000 investment into almost $15,000 by 2030.
Should you buy stock in Marvell Technology right now?
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Bank of America is an advertising partner of Motley Fool Money. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Marvell Technology, and iShares Trust-iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
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