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Marvell (MRVL) shares are inching higher on Thursday morning after RBC’s senior analyst Srini Pajjuri raised his price target on the custom AI chips specialist to $240.
Pajjuri’s bullish call arrives only a day after MRVL reported stellar Q1 earnings and issued better-than-expected guidance on surging demand for optical connectivity and custom accelerators.
Year-to-date, Marvell stock is up more than 120% at the time of writing.
Here’s Why RBC Raised Its Price Target on Marvell Stock
According to Pajjuri, Marvell’s updated long-term revenue outlook, including upward revisions to fiscal 2027 and fiscal 2028 estimates, reflects strengthening momentum across both its connectivity and custom silicon businesses.
The analyst highlighted MRVL’s leadership in 800G optical connectivity, a segment experiencing rapid adoption as hyperscalers upgrade data center networks to support AI training clusters.
His research note also pointed to the firm’s expanding XPU (custom accelerator) pipeline, which management expects will more than double in FY28, with similar growth potential into FY29.
Pajjuri recommends buying MRVL shares as the company’s roadmap includes scale-up switches, co-packaged optics, and next-generation optical modules — each representing a multi-billion-dollar serviceable market.
Q1 Earnings Warrant Buying MRVL Shares
Beyond RBC’s upgrade, the broader investment case for Marvell shares continues to strengthen as the company cements itself as a critical supplier to hyperscale AI buildouts.
In Q1, the Nasdaq-listed firm showcased 35% year-on-year sales growth, driven by “exceptional AI-related bookings” and solid demand for optical interconnects, the backbone of modern artificial intelligence clusters.
MRVL’s custom silicon business is scaling rapidly as cloud providers increasingly seek specialized accelerators to complement GPUs and optimize inference workloads.
Plus, the company is demonstrating that its AI pivot is translating into high-quality profitability.
Marvell delivered an impressive 58.9% adjusted gross margin in Q1 and generated a record $638.8 million in operational cash flow, reinforcing its ability to convert AI-driven revenue into durable liquidity.
Marvell Remains Buy-Rated Among Wall Street Firms
Other Wall Street analysts also remain bullish on MRVL stock, given its exposure to the 800G-to-1.6T optical upgrade cycle and multi-year visibility into hyperscaler demand.
The consensus rating on Marvell Technology sits at “Strong Buy” currently, with price targets going as high as $300, indicating potential upside of another 50% from here.
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