RBC Initiates Coverage on Marvell (MRVL), Cites 25% Valuation Discount to Peers

Marvell Technology, Inc. (NASDAQ:MRVL) is one of the AI Stocks Making Waves on Wall Street. On January 14, RBC Capital analyst Srini Pajjuri initiated coverage on the stock with an “Outperform” rating and a price target of $105. The analyst sees multiple growth drivers for Marvell and an undervalued entry point.

According to Pajjuri, the key debate surrounding the stock is whether management’s outlook for more than 20% data center growth in fiscal 2027, and over 40% growth in fiscal 2028, is achievable.

Marvell appears to have robust orders for the AWS Trainium3 chip program, while the recent Celestial acquisition and warrant agreement suggest that the company is likely to remain a key ASIC supplier for Trainium4.

Analysts further noted how Microsoft’s ASIC seems to be on track, adding that the management’s revenue target of less than $1 billion by fiscal 2028 looks conservative. Beyond custom silicon, MRVL’s optical business also holds a strong foothold, while scale-up networking and custom SmartNICs represent underappreciated growth opportunities.

“Valuation is at a 25% discount to peers, which we think makes risk/reward attractive. Initiate at Outperform.”

Marvell Technology, Inc. (NASDAQ:MRVL) develops and manufactures semiconductors, with a heavy focus on data centers.

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Disclosure: None.