Marvell Stock Forecast: Revenue Hits Record High Yet Shares Drop Over 7% Post-Market, Can MRVL Keep Rising?

TradingKey - On August 27 ET, Marvell Technology (MRVL) closed down 1.30% for the day at $241.93. After the company reported its second-quarter fiscal 2027 results post-market, the stock fell more than 7% at one point. Notably, this decline was not driven by deteriorating performance: Marvell's revenue, EPS, data center revenue, and third-quarter guidance all met or exceeded market expectations, and the company also raised its revenue forecasts for fiscal 2027 and 2028. The market reaction was more likely tied to elevated expectations after a prior sharp stock rally, as well as the timing of when incremental revenue from its partnership with Google (GOOGL) will materialize.

Marvell Earnings Hit Record High

According to the earnings report, Marvell's second-quarter revenue reached a record $2.739 billion, up 37% year-over-year, exceeding Wall Street expectations of approximately $2.72 billion, while adjusted EPS was $0.94, also slightly topping market expectations of $0.93. The company's operating cash flow reached $606 million, and its adjusted gross margin stood at 58.9%, as overall financial performance continued to grow.

The primary driver of growth in this earnings report came from the AI data center business. Second-quarter data center revenue reached a record $2.17 billion, up 46% year-over-year and 18% quarter-over-quarter, accounting for nearly 80% of total revenue. CEO Matt Murphy stated that AI-related orders remain exceptionally strong, with growth coming from multiple product lines including optical interconnects, switching chips, and custom silicon.

More importantly, this growth is expected to accelerate further. Marvell expects third-quarter data center revenue to grow over 20% quarter-over-quarter and approximately 75% year-over-year; its data center revenue growth forecast for fiscal year 2027 was also raised from about 50% to around 60%. The company simultaneously projects third-quarter revenue of approximately $3.15 billion ± 5%, higher than analysts' forecast of about $3.03 billion; adjusted EPS is expected to be $1.10 ± $0.05, compared to the market's previous estimate of around $1.07. The full-year revenue forecast was raised from $11.5 billion to approximately $12 billion, up about 45% year-over-year.

At the same time, Marvell expects fiscal year 2028 revenue to reach approximately $18 billion, a year-over-year increase of about 50%, up from its previous forecast of $16.5 billion. Among this, the data center business is expected to grow by more than 60%, and custom silicon revenue is projected to more than double.

Why Is MRVL Stock Falling After Hours?

Analysts attributed the after-hours decline in Marvell's stock price primarily to the potential delay until 2029 in realizing incremental revenue from its Google partnership.

Marvell recently expanded its partnership with Alphabet's Google to collaborate on areas including custom AI chips, with Google acquiring warrants to purchase nearly 59 million Marvell shares at $206.58 per share. The market had previously viewed this partnership as a major incremental driver for Marvell's future revenue.

However, management explicitly noted during the earnings call that revenue from projects tied to the new warrant agreement through fiscal 2028 is already factored into current custom chip revenue targets, with more significant incremental contributions expected primarily in fiscal 2029 and beyond. This dampened market expectations that the Google deal would trigger immediate upward revisions to revenue forecasts.

In addition, high valuation and excessive cumulative gains contributed to Marvell's after-hours decline. Prior to the earnings release, MRVL had gained over 180% year-to-date, hitting an all-time high of $329.88 in June. Although UBS maintained its "Buy" rating, it had previously trimmed its price target from $340 to $300, citing valuation multiple adjustments as one of the reasons.

Marvell Stock Price Technical Analysis

Marvell daily stock chart, Source: TradingView

Looking at Marvell's daily stock chart, the price has continued to rebound recently after pulling back to around $163, accumulating a gain of nearly 30% this month. The stock tested the resistance level near $252 twice without breaking out, indicating clear resistance at this level and a weakening in bullish momentum; meanwhile, after the earnings report was released, the stock fell over 7% in after-hours trading, further boosting short-term bearish momentum.

Currently, if the stock maintains Thursday's after-hours trend at today's open, it may test the support level at $222, which also sits near the 20-day moving average. If this level fails to hold, the stock may further test the $210 support level. Should the decline continue, the stock may move down to fill the gap between $193 and $202.

On the upside, the primary resistance zone above to watch is $252-$260. If the stock breaks out and stabilizes above $260, it will open up upside room toward the $300 mark. A further breakout above $300 could see the stock test its all-time high of $329.88, with potential to refresh record highs and test the $400 mark.