Rosenblatt Assumes Marvell at Buy, $300 PT

Rosenblatt analyst Sajal Dogra assumes coverage on Marvell (NASDAQ: MRVL) with a Buy rating and a price target of $300.

“We are transferring coverage of MRVL to Sajal Dogra with a Buy Rating MRVL reports 2Q results Thursday after the close.

We expect another beat-and-raise led by strong 25%+ sequential growth in optical interconnects (as evidenced by LITE/COHR/MTSI prints), while the bigger debate shifts toward the large custom-silicon ramps in FY28/FY29, including Microsoft Maia, AWS Trainium and now a materially expanded Google relationship.

We do not expect management to revise its previously stated FY28/FY29 interconnect/custom framework, saving it instead for the Investor Day in early October.

Our earnings framework suggests roughly $10.50 of FY29 earnings power, with further upside as scale-up and multi-rack AI architectures increase networking and optical intensity.

Reflecting this higher earnings trajectory, we are raising our estimates and increasing our price target to $300 (from $240), based on a 29x FY29 earnings multiple. Marvell remains a core long idea.

For long-term investors, the ASIC win/loss narratives obscure a broader reality.

In our view, the thesis of rising capital intensity creating “picks-and-shovels” winners is applicable to leading-edge fabless semiconductor companies as well.

With chip development costs now running over ~$500M for a single chip design vs. ~$50M over a decade ago, the rising cost curve has resulted in a natural winnowing of the digital semiconductor supplier base, in turn driving returns to scale for a consolidator like Marvell.

Marvell benefits twice from rising design costs, lower development cost per socket through IP reuse, and higher revenue per R&D dollar through reuse across customers/products.

Marvell has deep strategic customer engagements with the major cloud companies, co-designing custom ASIC chips and creating a barrier to entry that drives longer, more predictable product cycles, lower cyclicality, and attractive incremental margins and returns on capital.”

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