Can Marvell Stock Drop From Here?

Over the past twelve months, Marvell Technology (MRVL) stock has returned 216%, easily outpacing a roughly 18% return for the S&P 500. On October 6, management set a fiscal 2031 revenue target of $70 billion to $90 billion, and the shares closed up about 6% that day. Yet that target remains a forecast rather than a result. Today’s buyers carry the risk if Marvell falls short. So what are you paying for Marvell’s growth today?

What Are You Paying For Marvell Stock?

Investors are currently paying 91.8 times Marvell’s earnings over the past twelve months, against 22.3 for the S&P 500. Those earnings exceed Marvell’s operating profit over the same period, so a portion of them came from outside its operations. Furthermore, the share price has climbed much faster than the underlying business. Marvell’s sales over its latest four reported quarters reached $9.5 billion, up from $7.2 billion a year earlier.

For that multiple to contract without a drop in the share price, Marvell’s earnings must rise, and by more than they appear to, since a one-time pre-tax gain of about $1.8 billion from the sale of its automotive Ethernet business, booked in the quarter ended November 1, 2025, will drop out of the trailing figure after the next report. Management says its non-GAAP operating margin, an adjusted measure rather than the reported earnings behind the 91.8 multiple, is likely to enter a long-term target range of 38% to 40% in fiscal Q4 2027. Until that margin materializes in the results, part of the premium paid today may cover profit that has not yet been earned.

Marvell’s Revenue Is Outpacing The S&P 500

Marvell’s revenue grew 20.5% a year on average over the past three years, well above the 5.9% pace for the S&P 500. Growth accelerated in the latest quarter. Revenue reached a record $2.739 billion in fiscal Q2 2027, up 37% from a year earlier. Data center chips accounted for 79% of that quarter’s revenue, and their sales rose 46% from the prior year.

Buyers may also be paying for anticipated growth, and management has been raising its outlook. During the latest earnings call, management lifted the fiscal 2028 revenue outlook to about $18 billion, up from $16.5 billion a quarter earlier. At its October 6 Investor Day, management raised that outlook again, to about $20 billion. Executives also expect the custom business, which involves chips built to a customer’s own design, to more than double in fiscal 2028. Alongside that forecast, Marvell disclosed an expanded commercial agreement with one of the largest buyers of custom chips.

Has Marvell Stock Lost Half Its Value Before?

The answer is yes. Marvell stock fell 55% during the 2025 US tariff shock, compared with a 19% decline for the S&P 500. The shares dropped 58% during the 2022 inflation shock and Fed tightening, while the broader index fell 24%. Those represent just two of five market shocks since 2022, and Marvell fell further than the S&P 500 in all five.

There is also a risk inside the growth. Management expects operating leverage to lift the operating margin. Yet executives simultaneously anticipate the gross margin will slip as the custom business ramps up. Marvell guided its non-GAAP gross margin to 57.5% to 58.5% for fiscal Q3 2027, down from a non-GAAP 58.9% in fiscal Q2.

Marvell’s fiscal Q3 2027 revenue will be the number to watch at its next quarterly report, measured against management’s guide of $3.15 billion, plus or minus 5%. A result near the top of that range would support the raised outlook. Conversely, a figure near the bottom would put that forecast in doubt.

Does This Mean You Should Act On MRVL?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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