In a semiconductor market
increasingly driven by AI, data infrastructure, and cloud demand, Marvell
Technology (NASDAQ: MRVL) delivered a very strong Q2 Fiscal year 2026 results.
With revenues surging, earnings turning positive after prior losses, and
multiple tailwinds in its business, Marvell is positioning itself not just as a
growth play but as a value pick for investors who believe in the long-term
secular trends. In this article we will dive into Marvell Technology recent earnings,
stock performance & valuation, growth potential, and the risks investor
should consider.
About Marvell Technology
Marvell Technology, founded in
1995, is a U.S.-based semiconductor company focused on data infrastructure. Its
business spans custom silicon, electro-optics, networking (enterprise &
carrier infrastructure), storage, security, and increasingly, AI-oriented
platforms. Over recent years, Marvell has shifted much of its strategy toward
higher-growth end markets such as AI, custom processors, data centers, and
cloud infrastructure. Its products are used by cloud hyperscalers,
telecommunication companies, enterprise networking, etc. Its evolution from
more traditional networking and storage into AI and custom accelerators makes
it a company to watch in the current AI investment cycle.
Marvell Financial Performance
Marvell Technology delivered a
strong financial performance in Q2 2026 which ended in July 2025, with revenue
reaching $2 billion, a sharp 57.6% increase from $1.27 billion in Q2 2025.
Earnings per share (EPS) turned positive at $0.22, compared to a loss of $0.22
in the same quarter last year, marking a remarkable 200% improvement. On a
trailing twelve-month (TTM) basis, revenue grew to $7.23 billion, up 37.05%
from $5.28 billion, while EPS improved significantly to –$0.12 from –$1.12, an
89.29% improvement year over year. Free cash flow per share (TTM) also
strengthened to $1.77, rising 7.93% from $1.64 a year earlier, supported by a
robust free cash flow margin of 21.2%. The company’s gross profit margin stood
at 49.59%, although its net profit margin remained slightly negative at –1.43%,
reflecting the ongoing transition toward consistent profitability. Returns were
modest with ROA at –0.5% and ROE at –0.75%, while the balance sheet remained
healthy with a debt-to-equity ratio of just 0.36.
Over the past five years, Marvell
Technology’s revenue has been growing at a 21.9% CAGR, GAAP net income has
remained negative, and free cash flow has been growing at an 18.7% CAGR.
Although Marvell’s net income is still negative on a GAAP basis, the trend
could start to turn positive this year.
Marvell Fiscal 2026 Financial
Forecast
Looking ahead, analysts project
continued momentum, forecasting 2026 revenue of $8.14 billion, representing a
41.17% increase from 2025’s $5.77 billion, alongside non-GAAP EPS of $2.80, up
78.37% from $1.57. Reflecting this optimism, analysts maintain a Buy rating
with a price target of $86.10, suggesting a potential 29.3% upside, and the
most bullish target reaching $122, implying an 83.23% upside from current
levels.
MRVL Stock Price Performance
and Valuation
At a current price of $66.59 per share, Marvell’s stock has declined 11% over the past year, underperforming the S&P 500’s 18.6% gain during the same period. Over the longer term, the stock has risen 71.8% in the last five years, though still trailing the S&P 500’s 96.8% increase.
The company offers a modest dividend yield of 0.36%,
making it more of a growth play than an income stock. From a valuation
standpoint, Marvell trades at a P/S ratio of 7.96 (TTM) and a forward P/S of
7.05. Its non-GAAP P/E stands at 28.7 (TTM) with a more attractive forward P/E
of 23.78. Meanwhile, the P/FCF ratio of 37.43 indicates a premium.
Based on Fiscal.ai data, if we
look at the valuation over the past five years, the forward P/S is slightly
above the average, while the forward P/E and P/FCF are below the average. This
indicates a potential undervaluation, as Marvell Technology is still projected
to grow rapidly due to strong demand in the AI industry.
Marvell Growth Potential
Marvell growth prospect remains
strong, driven by several factors.
- AI Custom Silicon Revenue
Surge and Hyperscaler Expansion
Marvell Technology's custom silicon business is a major growth driver, now involved in over 50 AI design projects with more than 10 customers. This surge is driven by hyperscalers seeking cost-effective, specialized AI infrastructure. In Q2 fiscal 2026, Marvell reported record revenue of $2.006 billion, up 58% year-over-year, with the data center segment contributing $1.49 billion (74% of total revenue) and growing 69% year-over-year. Key design wins include AWS's Trainium 3 and Microsoft's Maia300, supported by advances in 2nm custom SRAM and 64 Gbps die-to-die interface IP. Marvell's integrated approach across R&D, manufacturing, and 2.5D packaging enables efficient, high-performance AI solutions. Management forecasts AI-related revenue could surpass $4 billion by 2025-2026, aiming to capture 20% of the $55 billion custom AI chip market by 2028, reflecting aggressive expansion in this fast-growing field. - Electro-Optics Platform
Innovation Driving Data Center Connectivity
Marvell Technology is advancing its electro-optics leadership with its Nova 1.6 Tbps PAM4 platform, doubling optical bandwidth while reducing power and cost per bit by 30%. This innovation is a key growth factor as electro-optics contributed to a 69% year-over-year revenue surge in the data center segment. The portfolio features industry-first solutions like the 800G multimode platform and 200 Gbps per lambda optical DSP technology, enabling 1.6 Tbps pluggable modules vital for scaling AI clusters. These interconnects, including 100-Gbps PAM and next-gen 200-Gbps products, address bottlenecks in data center networks transitioning to 51.2 Tbps architectures. Marvell’s upcoming PCIe Gen6 retimers and 51.2T switches, launching in late FY2025, will deliver comprehensive AI infrastructure solutions. With data center bandwidth demand growing over 50% annually due to AI, Marvell’s electro-optics offer critical performance, cost, and reliability advantages. - Enterprise Networking and
Carrier Infrastructure Market Recovery
After prolonged weakness, Marvell is seeing a strong recovery in enterprise networking and carrier infrastructure in Q2 fiscal 2026. Enterprise networking revenue grew 28% year-over-year to $193.6 million, with a 9% sequential increase, marking a clear turnaround. Carrier infrastructure revenue rose 71% year-over-year to $130.1 million, though it dropped slightly by 6% sequentially. This improvement stems from increased capital spending by enterprises and carriers upgrading their infrastructure to handle rising data traffic and new technologies. Management noted a significant acceleration in the recovery pace of these markets alongside AI demand, reflecting Marvell’s renewed focus post-portfolio optimization. Its suite of networking, security, compute, and storage solutions positions the company to capitalize on borderless campus upgrades and 5G rollouts. CEO Matt Murphy expects sequential growth across all end markets in Q3, indicating broad momentum beyond AI data center demand.
Risks to Consider
While Marvell Technology growth
prospect is strong, we should be mindful of potential risks.
- Technological Disruption and
Competition
Marvell operates in a highly competitive semiconductor industry with rapid innovation. Failure to keep up with emerging technologies like AI and machine learning could result in loss of market share and revenue to rivals such as Broadcom, Intel, and Qualcomm. Intense competition also drives price wars and margin pressure. - Regulatory and Governance
Concerns
Marvell has faced past regulatory scrutiny for accounting issues, including SEC charges related to revenue recognition manipulation in 2019 and other governance red flags. While improvements have been made, these historical issues suggest ongoing risks around corporate governance and financial reporting. - Macro-Economic and
Geopolitical Risks
Factors like economic downturns and geopolitical instability can negatively affect demand for semiconductors and Marvell’s operations globally. Geographic diversification and risk management remain critical but cannot fully eliminate such external risks.
Conclusion
Marvell Technology’s Q2 2026
results highlight strong revenue and earnings growth, improving cash flow, and
a solid balance sheet, supported by expanding opportunities in AI, cloud, and
data center infrastructure. While its stock has underperformed the broader
market recently, valuations remain attractive when weighed against future
growth potential. With analysts forecasting robust revenue and EPS increases
and assigning bullish price targets, MRVL stands out as a compelling long-term
investment opportunity for growth-focused investors despite near-term risks.
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