Marvell Stock Has More Than Tripled This Year. I Think It Can Double Again by 2031.

Marvell Technology (NASDAQ:MRVL) started 2026 at about $85 per share. As I write, it's near $263 -- more than triple where it began the year.

A gain like that can leave little for the next buyer. But the chipmaker's growth is speeding up, and management sees revenue rising about 50% to about $18 billion in fiscal 2028, which ends in January 2028.

I think this growth can lift the stock to around $527 by the end of 2031. That'd be double today's price, or a return of about 14% a year, and it doesn't need a higher valuation than the stock has now.

Image source: Getty Images.

Growth is still speeding up

Showing how fast demand is building, Marvell's revenue for the quarter ended Aug. 1 (the fiscal second quarter of 2027) rose 37% year over year to $2.74 billion. Revenue growth has now accelerated for two straight quarters, up from 22% in the period ended in January and 28% in the quarter after it. Data center revenue, which was 79% of the total, climbed 46%, up from 27% in the previous quarter. And management guided for around $3.15 billion of revenue this quarter, which would mean growth of over 50%.

Profits are keeping up. Earnings per share on a non-GAAP (adjusted) basis rose 40% to $0.94, and the adjusted operating margin widened by 1.8 percentage points to 36.6%. Chief financial officer Dan Durn said the margin will probably hit the company's 38% to 40% target range in the fiscal fourth quarter.

Custom chips and optics fuel the growth

Much of the growth comes from two businesses. The first is custom chips, which Marvell designs for one cloud customer's own artificial intelligence (AI) systems. Management expects custom revenue to more than double in fiscal 2028.

CEO Matt Murphy has talked about custom revenue of over $10 billion in fiscal 2029, and he sounded even more confident on the fiscal second-quarter earnings call.

"But clearly, there's a lot of upside bias in those numbers in fiscal '29 and beyond in custom," Murphy said.

Much of that confidence traces to Google, a unit of Alphabet. In August, Marvell granted Google a warrant to buy up to around 59 million Marvell shares. Most of them vest in stages -- one for every $500 million in custom chips Google buys through fiscal 2033, up to $120 billion total.

Google, of course, hasn't promised to buy that much. But the setup shows how big the relationship could grow.

The second business is optical connectivity, the chips in the links that move data between AI servers. When management lifted its outlook in May, it pointed to strong demand for its products in the latest 1.6-terabit optical links, plus optics that connect AI chips in one system.

What would it take to double?

At around $263, shares sell for about 39 times the earnings forecast for fiscal 2028, or about twice the forward price-to-earnings ratio of about 19 for the S&P 500 (SNPINDEX:^GSPC). For a business expecting 50% revenue growth next year, I'd call the premium fair.

Now keep the price-to-earnings multiple at 39. By the end of 2031, investors will probably value Marvell using its fiscal 2033 earnings. For the stock to double, then, fiscal 2033 earnings have to be twice the fiscal 2028 number, which takes about 15% yearly earnings growth over those five years.

If margins and the share count stay flat, revenue would need to rise from management's $18 billion forecast for fiscal 2028 to about $36 billion by fiscal 2033. By comparison, the Google warrant alone is built around as much as $120 billion in custom chip purchases through fiscal 2033, an average of over $18 billion a year.

Sure, the path has risks. Custom chips have lower gross margins than Marvell's other products, and management guided the adjusted gross margin for the fiscal third quarter to between 57.5% and 58.5%, down from 58.9%. AI spending might also slow long before 2031.

But 15% a year is far below the rate Marvell is growing now. And if revenue rises faster than that after fiscal 2028, the stock might double even if its valuation multiple drops.

Marvell holds an investor day in New York on Tuesday, Oct. 6, and new long-term targets might come with it. But this forecast doesn't need them to beat today's outlook.

Can Marvell stock double again by the end of 2031? I think it can, and I'd consider buying shares at today's price, maybe a bit at a time. The stock lost around half its value between its June peak and late July, and it might drop that much again.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Marvell Technology. The Motley Fool has a disclosure policy.