Marvell Named 'Core Long Idea' by Rosenblatt, Price Target Raised to $300 on AI Chip Momentum

Rosenblatt has designated Marvell Technology (MRVL) a "core long idea," initiating coverage with a Buy rating and substantially raising its price target to $300 from a previous $240. The analyst firm's bullish outlook is rooted in the semiconductor company's burgeoning custom silicon business and strong demand for its optical interconnects ahead of its second-quarter earnings report.

Analyst Upgrades Price Target

In a note to clients, Rosenblatt analyst Sajal Dogra outlined the new $300 price target, which is based on a 29x multiple of the firm's fiscal year 2029 earnings power estimate of approximately $10.50 per share. The upgrade comes just before Marvell is scheduled to release its second-quarter financial results on Thursday after the market close.

Rosenblatt anticipates a "beat-and-raise" performance from the company. This expectation is driven by strong sequential growth forecast to exceed 25% in optical interconnects, a trend supported by recent results from industry peers Lumentum (LITE), Coherent (COHR), and MACOM Technology Solutions (MTSI).

Custom Silicon and AI Demand

A key component of the long-term thesis is Marvell's growing pipeline of large-scale custom-silicon projects with major cloud providers. The firm highlighted significant product ramps expected in fiscal years 2028 and 2029, including projects for:

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• Microsoft's Maia AI accelerator
• Amazon's AWS Trainium chip
• An expanded relationship with Google

Rosenblatt noted that further details on this framework are not expected from Marvell's management until its Investor Day, which is scheduled for early October.

Favorable Market Dynamics

The analyst also pointed to a broader industry trend that benefits Marvell: the dramatic increase in chip development costs. The cost for a single advanced chip design has surged to over $500 million, compared to approximately $50 million a decade ago, according to the note.

This rising cost curve is driving consolidation among semiconductor suppliers and creating returns to scale for established players. Rosenblatt stated that Marvell's deep strategic engagements, which involve co-designing custom ASICs with cloud giants, create high barriers to entry and lead to more predictable product cycles, lower cyclicality, and attractive profit margins.