Marvell Technology, Inc. is a leading semiconductor company focused on custom compute and optical solutions, particularly in the rapidly growing artificial intelligence (AI) sector.

Despite facing slight gross margin declines due to the ramp-up of custom compute solutions, operating margins are expected to expand significantly by about 280 basis points in the third quarter of fiscal 2025.

Marvell's AI revenues are projected to exceed $1.5 billion in fiscal year 2025 and reach approximately $2.5 billion by fiscal year 2027, bolstered by partnerships with major tech firms like Amazon, Google, and Microsoft.

The company's growth is primarily driven by strong demand for AI products, especially in data center application-specific integrated circuits (ASICs), networking, and electro-optics.

Looking ahead, Marvell expects a 15% total revenue increase and a remarkable 33% surge in AI revenues for the fiscal fourth quarter of 2025, underscoring its robust market position.

Analysts anticipate that Marvell's management may revise their AI sales targets upward, projecting $1.5 billion for fiscal 2025 and $2.5 billion for fiscal 2026 due to rising demand.

The company's Carrier/Enterprise Networking segment is recovering, with a projected 5% growth in the upcoming quarter, supported by increased enterprise and carrier spending.

Rosenblatt maintains a 'buy' rating for Marvell, with a price target of $120, reflecting a potential upside of about 30% as investor interest in AI chip applications grows.

For fiscal 2026, Rosenblatt forecasts a 31% revenue increase to $7.2 billion, largely driven by AI-related products and an expanding market share.

For the October quarter, analysts project Marvell will achieve approximately $1.45 billion in revenue, with a non-GAAP profit of around 40 cents per share.

Marvell is set to report its third-quarter earnings on December 3, 2024, after market close, which will provide further insights into its financial performance.

However, potential risks remain, including ongoing gross margin pressures that could impact short-term profitability and vulnerabilities in the networking sector due to economic downturns.