Options selling with Christian
Growth Investor, Options Selling, Creator of Stock Catalysts
Marvell's after-hours selloff makes no sense after it beat on every metric and raised guidance across the board, helped by its new Google deal and the read-through from Nvidia's earnings. Plenty of AI names trade at richer valuations with far less year-over-year growth. The next key catalyst is its investor day on October 6. x.com x.com x.com x.com x.comÂ
Marvell is one of the best, if not the best, ways to play custom AI silicon over the next 12-24 months. It works with all four major US hyperscalers, including a new expanded Google TPU deal, a longstanding AWS custom-silicon and networking relationship, and Microsoft and Meta custom-silicon exposure. Nvidia just invested $2B in it. ASIC demand keeps growing as hyperscalers cut costs and reduce dependence on Nvidia. Earnings expectations are high, so short-term moves can go either way. x.comÂ
Alphabet's businesses beyond search are why it will lead the real AI boom. Google Cloud, DeepMind and Waymo broaden its reach, and its $900 million SpaceX investment is now worth $85 billion. Fear emerging as the shares fall is an opportunity; a decline toward the buy zone is welcome, even as Q3 capex has taken a large hit out of free cash flow. x.com x.com x.com x.comÂ
Low forward earnings multiples across eleven stocks cannot persist indefinitely. Nvidia trades near 17.5x, its lowest in over a decade; Oracle near 15x, its lowest in six years. Uber is at 17x, Broadcom 19x, Vistra 15x, AppLovin 14.5x, TSMC 19x, Forgent Power Solutions 18x, Nokia 19.5x, American Express 17x and Western Digital 14x. x.com x.com x.com x.com x.com x.com x.com x.com x.com x.com x.comÂ
Marvell's ambitious long-range outlook is encouraging about hyperscaler and AI-lab spending plans, but hitting it depends on AI revenue and token consumption soaring through decade's end. Even if its FY28 estimates rise again, Marvell trades at a healthy premium to Nvidia and Broadcom, especially on a GAAP basis, and those two are growing fast too. x.comÂ
Marvell's custom-silicon story still feels early, making it the name to keep coming back to on the memory and AI bid. Rather than chasing the pre-market jump toward 308, a retest of around 292 is the better setup, with targets of 308, 322 and 340. x.comÂ
Marvell's Q2 confirms a multi-year custom silicon and optical supercycle, with Q3 revenue guidance of $3.15 billion far above the $3.03 billion consensus. The AWS shift to 3nm Trainium 3 is ramping faster than expected, joined by 800G and 1.6T optical DSPs, Teralynx switching and Microsoft's Maia. Attach silicon around accelerators, including for Google, gives it a tollbooth across hyperscale infrastructure and a path to about $11 of CY28 EPS against a $9.64 consensus. x.com x.comÂ
Marvell's strong quarter was already priced in, so a sell-the-news decline is likelier. Q2 revenue rose 37% to $2.739B, data center revenue 46%, and Q3 guidance of $3.15B beat estimates; management sees custom silicon revenue more than doubling in FY28 and a path to about $18B of FY28 revenue. But the Google partnership and AI growth were largely traded ahead, and the stock never broke its rising channel's top. Long term, it is still a good company to add to at better prices before the midterms. … Show more
Marvell is down 16% from its recent all-time high despite strong signals that aren't being talked about enough. Jensen Huang called it the next trillion-dollar company on June 2, President Trump made his largest purchase, $5.25M of Marvell, in July, and Marvell signed a custom chip partnership with Alphabet last month. x.comÂ
Marvell's custom AI silicon business is scaling very fast after Google struck a deal with it for custom chips covering AI, networking and memory, including an equity stake in Marvell. Stifel says the deal could generate up to $120B of revenue over about seven years, far above Marvell's current annual run rate. x.com x.comÂ
Marvell is a loser from the AI-lab slowdown, because it can't earn premium margins if Nvidia and Broadcom also see a pause. Lab leaders including Elon Musk, Dario Amodei and Sam Altman have pivoted to warning that AI could kill you, which, with AI already polling badly, will make it much harder for AI to attract investment. x.comÂ
Marvell's $70-90 billion FY31 revenue target looks credible: COO Chris Koopmans said key foundry, substrate and packaging suppliers get five-year forecasts and had already seen it before investor day. A $500 price target still looks too aggressive for now; Marvell must show it can grow its networking and photonics segment to deserve a safe price increase. x.com x.comÂ
