Diverging Views Emerge on Marvell Technology’s Valuation

Market experts are offering conflicting perspectives on the investment case for Marvell Technology. This division was highlighted recently when Royal Bank of Canada upgraded its rating to "Moderate Buy," while Zacks Investment Research simultaneously downgraded the semiconductor firm's stock to "Hold." The core debate centers on whether the company's current market valuation accurately reflects its growth prospects, particularly within the artificial intelligence sector.

The company's recent financial performance provides context for the debate. For its third fiscal quarter, Marvell reported earnings of $0.76 per share on revenue of $2.07 billion, surpassing consensus estimates. Looking ahead, management has provided guidance for the current quarter, projecting earnings per share in a range between $0.74 and $0.84. Further clarity is anticipated with the release of the Q4 2026 report, scheduled for early March.

Bullish Case: Data Center and AI Infrastructure Expansion

The rationale behind Royal Bank of Canada's upgraded assessment appears rooted in Marvell's strategic positioning and projected growth. The company has provided ambitious revenue forecasts for its data center switching business, anticipating it will surpass $300 million in fiscal 2026 and grow to more than $500 million by 2027. This expansion is expected to be driven by the company's 12.8T switches and the next-generation 51.2T products, whose ramp-up is projected for 2026.

Should investors sell immediately? Or is it worth buying Marvell Technology?

Marvell's corporate strategy is explicitly focused on capturing AI infrastructure demand. To bolster its capabilities in optical interconnect technologies for AI data centers, the company completed two significant acquisitions: Celestial AI in December 2025 and XConn Technologies for approximately $540 million in January 2026.

Bearish Counterpoint: Valuation and Execution Concerns

The more cautious stance from Zacks Investment Research likely stems from valuation considerations. Following a substantial share price appreciation over the past year, analysts question if the high expectations for AI-driven growth are already fully priced into the stock. Additionally, the integration of recent acquisitions carries inherent execution risks that could impact future performance.

The contrasting analyst opinions underscore a classic market dilemma: balancing demonstrated operational strength and compelling growth narratives against a stock price that may have advanced rapidly in anticipation of future success. Investors are now weighing these factors as they assess Marvell Technology's investment potential.