Colin Tedards
Founder of The Investor Channel & Equity Empire
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 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 wasted the AI boom and leadership's handling raises doubts. During last summer's bull run, when demand across the AI buildout was higher than ever, it still missed earnings and its CEO said they didn't know whether the demand was real. The stock fell 10-15% immediately and kept bleeding toward its April tariff-crash lows. x.comÂ
The market may still be underestimating Marvell as it becomes a key supplier of custom silicon and connectivity for the AI build-out. At its Investor Day, Marvell put its addressable market at about $400 billion by 2030, targeted about $20B of FY28 revenue and said revenue could reach $70-90B by FY31. Last quarter revenue rose 37% to $2.74B on AI and data-center demand, and Nvidia's Jensen Huang reportedly called Marvell the next trillion-dollar company. x.com x.comÂ
Marvell is expensive, growing more slowly and not founder-led, so owning it directly makes little sense. x.comÂ
Semiconductors could stay undersupplied for a long time as more capable AI per dollar creates more uses and drives compute demand. Micron and NVIDIA trade at low forward P/Es because investors fear peak cyclical earnings, yet current earnings show no slowdown. Shortages may worsen as AI adoption spreads, though the industry could remain cyclical; a reversal of the forced rollover trade is hoped for, not assured. x.com x.com x.comÂ
Marvell Technology is set to reverse after falling 28% from its all-time high, as its custom AI silicon and optical interconnects stitch hyperscaler data centers together. Nvidia's CEO has said Marvell could be a trillion-dollar company too. x.com x.comÂ
Broadcom's custom AI chips for major customers position it as a clear winner in the continuing AI buildout. Kris Patel's case that efficiency and total cost of ownership leave Broadcom room to gain share from incumbent Nvidia is persuasive. Broadcom has not seen peers' upside and is 30% below its highs, making the stock an opportunity. x.com x.comÂ
Marvell looks very expensive on 2027 estimates compared with Nvidia, though not a short at current levels. Memory spot is also a better bet, despite the week's fear. x.comÂ
Marvell looks interesting at less than 30x calendar-2027 EPS against expected 60-70% annual EPS growth, but overpaying for Lumentum could drive its shares lower. Marvell could pay up to $110B, roughly a 30% premium; the stock-versus-debt mix is unclear, and Lumentum holders might own a third of the combined company. If the deal falls apart, Marvell could rise 10-12%. x.comÂ
Marvell's roughly $90 billion valuation jump on a single comment is not sustainable; the only question is how long it can last. Per The Kobeissi Letter, the stock rose over 45% in two days after NVIDIA CEO Jensen Huang said it could become the next trillion-dollar company. x.comÂ
