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The shares of Marvell Technology (MRVL) sank about 14% between Dec. 3 and Dec. 26, at least partly due to concerns about market -share losses raised by investor bank Benchmark, along with HSBC and Barclays, two UK-based banks. However, Citi recently called these worries “misguided” and contended that the stock’s recent weakness has created “a buying opportunity.” The U.S.-based bank indicated that information which will be revealed at the upcoming CES conference will dispel the fears triggered by Benchmark and HSBC. CES will take place between Jan. 6 and Jan. 9.
Meanwhile, another U.S. bank, JPMorgan, also disputed the assertions by Benchmark and HSBC, while Marvell’s recently issued 2026 guidance indicates that the fears about MRVL stock are overdone. Among the other factors that should help Marvell over the longer term are the large size of its total addressable market and its relatively low valuation. In light of all of these points, some risk-tolerant, medium- to long-term investors should consider buying MRVL stock now.
About MRVL Stock
Marvell markets semiconductor systems used by data centers and to facilitate edge networking. Among its leading products are system-on-a-chip architectures and ethernet offerings.
In the company’s third quarter that ended on Nov. 1, its sales came in at $2.07 billion, up from $1.5 billion during the same period a year earlier. Additionally, the firm’s operating income rose to $357.8 million last quarter, versus an operating loss of $703 million in Q3 of the previous fiscal year.
Analysts on average expect Marvell’s earnings per share to surge 30.5% to $2.87 during its upcoming fiscal 2027 that ends in January 2027. The forward price-earnings ratio of MRVL stock is 39.3 times while its price-book ratio is 5.2 times.
The Contentions of Benchmark, HSBC, and Barclays
On Dec. 8, Benchmark lowered its rating on MRVL to “Hold” from “Buy” and stopped providing a price target on the name. Benchmark analyst Cody Acree, who made the call after speaking with sources in Silicon Valley, reported that he believes with a “high degree of conviction” that Amazon (AMZN) will not use Marvell’s XPUs for its Trainium 3 and Trainium 4 AI chips which are due to be released in the future. Amazon has been the largest purchaser of Marvell’s XPUs in the past. There has also been speculation that Microsoft (MSFT) could reduce its utilization of Marvell’s XPUs going forward.
Meanwhile, HSBC at the end of November contended that Marvell’s share of revenue from Amazon’s upcoming chips would drop compared with its past offerings. The UK-based bank has a “Hold” rating on MRVL
And finally, Barclays in October predicted that Marvell’s share of the 1.6T optics market would decline.
The Evidence Against the Banks’ Bearish Views
In a Dec. 23 note, Citi analyst Atif Malik, after meeting with two Marvell executives, wrote that fears about the company’s XPU business and its “opportunity at 1.6T are misguided.” Moreover, Malik called the stock’s “post-earnings weakness …. a buying opportunity,” and he believes that technology which Marvell will introduce at CES could help it convince Amazon to incorporate its offerings in AMZN’s Trainium 4 chip. He has a “Buy” rating on MRVL.
Similarly, JPMorgan analyst Harlan Sur, after meeting with Marvell’s COO, wrote that the firm said that it had obtained “purchase orders for all of ”2026 for Amazon's Trainum 3 chips.” As far as MSFT is concerned, Marvell asserted that its business with the tech giant “remains on track to ramp [in the] back-half of calendar year 2026 and into calendar year 2027,” Sur reported, adding that MRVL is “already working on next-gen… XPU programs for both customers.” Sur, who believes that Marvell’s business with both MSFT and AMZN is still “solidly intact,” has a $130 price target and an “Overweight” rating on MRVL stock.
Also importantly, Marvell‘s guidance for its Data Center segment, which was issued on Dec. 2 and includes its XPU business, calls for the unit’s revenue to surge by 25% in fiscal 2027 and by 40% in fiscal 2028.
The Bottom Line on MRVL Stock
It seems likely, although not certain, that the combination of JPMorgan, Citi, and Marvell’s upbeat guidance is far more reliable than the negative reports by Benchmark, HSBC and Barclays. In my experience, major companies rarely lie about the state of their businesses, and they usually are fairly honest about how their business looks two years or less into the future. Consequently, I think that the upbeat reports by JPMorgan and Citi, which are based on Marvell’s own statements, are rather reliable. Further, Marvell’s guidance, which appears to be rather upbeat, is also likely based on genuine data points.
Conversely, the negative reports by Benchmark HSBC and Barclays appear to be based largely on anonymous sources that may not be entirely reliable.
Therefore, I believe that Marvell probably has not lost a significant amount of business from Amazon or Microsoft.
Further, the total addressable market of Marvell’s AI data center business is a huge $85 billion, according to Oppenheimer. Also noteworthy is that, despite Marvell’s strong growth outlook, its price-book ratio is below the S&P 500 Index’s ($SPX) average level of 5.6 times, while its forward price-earnings ratio of 39.3 times is not very far above the S&P 500 average of 31.3 times.
In light of all of these points, I believe that risk-tolerant, medium- to long-term investors looking for increased exposure to the AI chip market should indeed consider buying MRVL on weakness.
