Michael Wiggins De Oliveira
Deep Value Returns, Equity Investing without Options or Leverage
Marvell is a steal at roughly 45x forward free cash flow for a business growing 50%, with a $440 price target by late 2027. It has raised its fiscal 2028 revenue growth outlook to 50%, with roughly $18 billion of revenue now in sight and a credible, clear path to about $5 billion of free cash flow, even though the stock is down more than 25% since June. x.comÂ
Marvell is on a clear path to about $2.5B of free cash flow within twelve months, backing a $440 price target by late 2027. It is growing revenue at 45%, raising its outlook and entering a period of explosive free cash flow, a combination the market rarely offers. The main risk is that nobody knows how long the AI capex boom will last, and demand could moderate sooner than expected, but investors don't need perfect visibility on that to make money here. 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 looks attractive even on current guidance, which keeps rising as AI infrastructure demand may be outpacing long-term models. Its fiscal 2028 revenue target has climbed from $13 billion in September 2025 to $18 billion now, up 38% in under a year. With fiscal 2027 guided at $12 billion, the next six quarters imply $24.84 billion of revenue and, at a 31.6% non-GAAP net margin, $7.85 billion of earnings, so at $216.62 the stock trades at about 24 times that. x.com x.comÂ
Marvell's potential Lumentum acquisition may fail to increase per-share value because the added profits may not cover dilution and financing costs. A simplified calculation using reported market values implies roughly 38%-45% more shares, requiring about 45% more combined net profit to preserve EPS; debt would add interest and repayment pressure. If the price already reflects future growth, a control premium and possible customer concerns add risk. x.comÂ
Marvell's new long-term model points to a $750-$900 stock by 2028-29. Management targets about $80B of revenue by CY2030, versus a $47B consensus, with a 55-60% revenue CAGR led by custom silicon growing 80% a year. Operating margins of 44-46% and opex growing at half the rate of revenue imply EPS above $30, versus $18 expected; 25-30x that gives $750-$900. Marvell has largely met its targets over the past decade, and the stock trades about 70% below its implied future value. x.com x.com x.com … Show more
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
A possible Lumentum deal could dilute Marvell's shares and add enough debt to cut forecast 2027-28 EPS by at least 20%. A 70% stock structure would require about 360M new shares and $32B in debt; a 50/50 structure, about 275M shares and $57B in debt. A higher multiple from today's 45x looks unlikely to offset the hit soon. The next year could be difficult, even if the deal proves very bullish from 2028 onward. x.comÂ
Marvell is easily the stock pick for the next decade. x.comÂ
Marvell trades at one of the lowest PEG ratios in chips with one of the highest composite ratings, and its cup-and-handle breakout points to a 330 price target. x.comÂ
Marvell's run looks like distribution, not accumulation: it doubled in four months on decelerating earnings, spiked on a CEO's compliment and printed its heaviest volume at the top. After Jensen Huang called it the next trillion-dollar company at Computex, it jumped 32% in a day, capping a 105% gain in 18 weeks on record volume of 441 million shares, while EPS growth slowed four straight quarters from 158% to 29%. A 40% collapse from the peak in five weeks followed, the mark of a climax run. … Show more
Owning Lumentum's laser fab could secure Marvell's FY28 supply and hedge its DSP franchise as optical links shift to CPO. The rumored deal's strategy makes sense, but short-term pain is likely: at a 30% premium, roughly $17.5B in new debt and the rest in stock, rough math puts EPS dilution near 15%. It turns accretive only if Lumentum outgrows Marvell at today's guided rates for five or six more quarters, which looks achievable while the laser shortage lasts. x.com x.com x.comÂ
