Marvell Technology (NASDAQ:MRVL) spent part of this week laying out a plan to become a far bigger company. Management targets $70 billion to $90 billion in revenue by fiscal 2031, up from a fiscal 2026 base of $8.2 billion. And yet the stock trades at 23.81 times expected earnings, below both its own history and its sector.
Few people have ever held a Marvell product, but plenty of their data has passed through one. The company designs chips that move information inside and between data centers: optical interconnects, networking switches, storage controllers, and custom processors built to order for cloud giants. Data centers now generate most of its sales. Whether that low multiple is an opening or a warning depends on two things: how far connectivity can carry growth on its own, and when the custom chip wave actually lands.
Already Inside the Biggest Clouds
Marvell’s edge is less about any single chip than about where its chips already sit. The company says its custom silicon is shipping to the top four hyperscalers, with multiple wins spanning several product generations. It also calls itself the market leader in coherent pluggable optics (the modules that link data centers over long distances), supplying the top five hyperscalers and shipping more than 1 million units.
That incumbency matters. A custom chip is co-designed with the customer over years, and a networking part qualified across a fleet isn’t swapped out casually. The next generation usually goes to the supplier already in the rack, which is why Marvell keeps stressing repeat wins over one-off deals. Curious which other chipmakers are riding the same AI networking boom? See the names investors are watching.
Connectivity Pays the Bills First
The latest quarter shows that position turning into revenue. In fiscal Q2 2027, total revenue rose 37% year over year to $2.74 billion, while data center sales jumped 46% to $2.17 billion. Data center now makes up 79% of the business, up from 76% the quarter before and 74% a year earlier. Management credited broad demand, including strong connectivity orders, and guided for about $3.15 billion in fiscal Q3 revenue.
Investor Day added scale. Marvell raised its fiscal 2028 revenue outlook to $20 billion, roughly $18 billion of it from data centers. It also lifted its fiscal 2029 custom revenue target to more than $12 billion, from $10 billion, a figure it expects to be more than triple the fiscal 2028 level. The moat looks to be widening. But notice the order: interconnect drives growth now, while custom chips arrive in force later.
What If the Custom Ramp Runs Late?
That sequencing is the real worry. After the fiscal Q2 report, shares fell because the outlook underwhelmed investors despite 37% growth, according to CNBC. The biggest custom leap sits two fiscal years out, and Marvell ties its fiscal 2031 custom target to broadening design wins across more customers. With its data center business leaning on a short list of hyperscalers, one delayed program or a lost next-generation socket could push the whole timeline back.
Still, the custom raise came alongside a higher fiscal 2028 target, not in place of it. Connectivity is growing fast enough to keep momentum going while the custom business scales. Another AI chip designer trades at a very different multiple. See how it stacks up against Marvell.
A Discount to Its Own Past
At 23.81 times forward earnings, as of October 6, investors are paying about $24 for every $1 of expected profit. That’s below Marvell’s five-year average of 30.52 and well under the sector’s 37.93. Meanwhile, earnings per share are expected to grow 66.91% in 2027, a pace that rarely comes with a below-average multiple. Fiscal Q2 earnings came in at $0.33 a share, against $0.94 adjusted. On the adjusted basis, management guided for about $1.10 in fiscal Q3 and laid out a path to more than $30 a share by fiscal 2031, with operating margins of 44% to 46%.
Put together, the market seems unwilling to pay up for targets that sit years away and depend on a back-loaded custom ramp. If the plan holds even partly, today’s multiple looks modest for this growth rate. If fiscal 2029 slips, that discount is the cushion. Hedge fund interest climbed, with 96 funds holding the stock in the most recent quarter, up from 79 in the prior one. Short interest sits at 4.18% of the float, which points to relatively limited bearish positioning.
Priced for Doubt, Not Ambition
The evidence points to a stock priced more for skepticism than for its stated plan. Under 24 times expected earnings, with data center growth accelerating and guidance pointing higher, Marvell looks inexpensive against its own past and its sector, as long as connectivity keeps compounding while custom chips scale. The setup suits growth investors comfortable with volatility and a multiyear horizon. A slip in the fiscal 2029 custom ramp, or a quarter where data center growth stalls, would change that picture quickly.
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