During the October 2 episode of Mad Money, Jim Cramer highlighted Marvell Technology, Inc.’s (NASDAQ:MRVL) upcoming investor meeting during his game plan for the week and its growing role in AI infrastructure:
Tuesday may be one of the most consequential days for semiconductors. Why? Because Matt Murphy, CEO of the red-hot Marvell Technology, holds an analyst meeting. These can be electric. I expect Murphy to lay out a long term game plan while showing how integral his company has become to the great data center buildout. He has created a genuine powerhouse here at Marvell and even though he’s a young person, he’s an elder statesman in the industry. I bet his presentation will be very strong with big reverberations throughout the hyperscaler world.
Marvell’s rapid growth has made the stock increasingly expensive, but there’s another question investors should be asking about those gains. How much of the company’s adjusted profit actually reaches shareholders?
Data Center Demand Is Already Showing Up in Results
Marvell Technology, Inc. enters its October 6 Investor Day following a strong fiscal second quarter 2027. Revenue increased 37% year-over-year to approximately $2.74 billion, with data center revenue growing 46%. Adjusted earnings per share reached $0.94, while operating cash flow totaled approximately $605.5 million. Management’s third-quarter revenue outlook was $3.15 billion, plus or minus 5%. MRVL made our list of 12 High-Flying AI Stocks, but five stocks ranked higher. See which stock claimed the #1 spot—and how the rankings were determined.
The company is also securing manufacturing capacity to support its optical connectivity business. On September 17, Marvell and GlobalFoundries expanded their multiyear agreement to increase production capacity for chips used in high-speed optical connections. The agreement covers technology used in pluggable optical transceivers and newer designs that bring optical connections closer to processors. These products address an important requirement of large AI systems, which is moving data efficiently between computing components. The expanded agreement builds on existing production and is intended to support Marvell’s growing requirements as data center networks move to higher speeds.
Dependence on Large Customers Raises the Stakes
Marvell received a Moonshot Score of 75.0/100 among our list of AI Stocks That Will Go to the Moon, but six companies received a higher score. Marvell Technology, Inc.’s expanding data center business also concentrates its exposure. In its latest quarterly filing, the company warned that customers could reduce purchases or change ordering patterns. It also mentioned the possibility that large customers develop their own semiconductor solutions, potentially reducing the business available to the company. Supply is another constraint. The company depends on a limited number of suppliers, including access to advanced manufacturing capacity at Taiwan Semiconductor Manufacturing Company. Strong demand needs to be matched by sufficient production capacity and timely delivery.
The valuation leaves substantial expectations attached to that execution. At the time of writing, Marvell trades at approximately 62x forward earnings, compared with 20x for Broadcom, a competitor in custom chips and networking. Broadcom’s software operations make the comparison imperfect, but Marvell still carries a considerable premium on this measure.
More Hedge Funds Take Positions Ahead of the Update
According to Insider Monkey’s database, 96 hedge funds held Marvell Technology, Inc. in the second quarter, up from 79 in the preceding quarter. Among those funds, D E Shaw held the most substantial position as the firm increased its holdings in the company by 658% to 2.5 million shares. Short interest stood at 4.18% of the public float. Fund participation increased substantially, although the short position shows that some investors remain positioned against the shares.
Cramer expects Murphy to make a strong case for Marvell’s future. Recent sales growth and the optical manufacturing agreement give him tangible developments to discuss. With the stock already carrying a high earnings multiple, investors will be looking for details on how new programs turn into revenue and profit, beyond another positive account of AI demand.
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