$10,000 in Marvell Stock a Decade Ago Is Worth About $206,000 Now. Repeating That Would Take 35% Annual Earnings Growth.

Marvell Technology (NASDAQ:MRVL) closed at $13.17 a share on Oct. 5, 2016. Ten years later to the day, it closed at $271.25.

On price alone, that turned a $10,000 stake into around $206,000, compounding at about 35% a year. In the same decade, $10,000 in the S&P 500 (SNPINDEX:^GSPC) rose to about $36,000 on the same basis.

But most of Marvell's rise is recent. Nearly three-quarters of it came in 2026 alone, as the shares more than tripled. And when I split the decade into stretches, I see the stock's valuation did almost as much of the work as the company's earnings.

Image source: The Motley Fool.

Two runs and a long stall

The first stretch was strong. By the end of 2021, Marvell stock had risen to $87.49, and the $10,000 stake was worth around $66,400.

Then the stock went nowhere for four years. Shares dropped over 60% from a December 2021 high to early January 2023, shrinking the stake to around $26,000 at the bottom.

They rebounded, of course. But Marvell finished 2025 at $84.98, slightly under where it ended 2021. Put another way, an investor who bought at the end of 2021 had nothing to show for four years of patience.

This year changed that. The stock started 2026 near $85, closed at a peak of $316.43 in early June, and nearly halved by late July before rebounding. As I write, that's a gain of around 219% this year, and it took the original $10,000 from about $64,500 to $206,000.

The valuation did almost as much as the earnings

Marvell's business grew a lot over the decade. Revenue climbed from $2.3 billion in fiscal 2017, which ended in January 2017, to around $9.5 billion in the last four reported quarters. Non-GAAP (adjusted) earnings per share went from $0.63 to $3.30 in the same period -- around a fivefold gain, or about 19% a year.

A decade ago, Marvell called itself a leader in storage, networking, and connectivity chips. Now, data centers bring in 79% of its revenue.

But a fivefold rise in earnings doesn't explain a 20-fold rise in the stock. The rest came from investors paying more for every dollar of profit.

At $13.17, shares traded at about 21 times adjusted earnings for fiscal 2017. Now, they trade at about 82 times the adjusted earnings Marvell posted in its past four quarters.

Adjusted earnings per share reached $1.57 in fiscal 2022 and were at exactly that level again in fiscal 2025. Then they jumped 81% to $2.84 in fiscal 2026, which ended in January 2026. But the stock went nowhere from the end of 2021 through 2025, because its price-to-earnings ratio dropped from about 56 times adjusted earnings for fiscal 2022 to about 30 times adjusted earnings for fiscal 2026.

This year ran the other way. Adjusted earnings per share over the last four quarters are up about 16% from fiscal 2026's total, but the stock tripled.

Investors are paying up for what management says is ahead. Late in August, Marvell forecast revenue of around $18 billion next fiscal year, and it expects its custom business, which designs chips to a cloud company's own specs, to more than double that year. Even on next fiscal year's expected earnings, the stock costs about 40 times earnings.

A repeat would need far faster earnings growth

Say investors still pay 82 times adjusted earnings in 2036. For the stock to climb 20-fold again, earnings per share would have to compound at around 35% a year for a full decade. That's almost double the rate of the last 10 years.

And if the price-to-earnings multiple slid back toward the 30 times adjusted earnings the stock fetched at the end of 2025, the growth needed would be far higher.

Much of that weight would fall on the custom business. On the August earnings call, CEO Matt Murphy pointed to more than $10 billion in custom revenue for fiscal 2029 -- over four times what all of Marvell took in during fiscal 2017. He said he saw upside to that figure, and Marvell will spell out its longer-term strategy at its investor day in New York on Oct. 6. But another 20-fold decade would arguably need growth far beyond fiscal 2029's target, lasting for years after that.

I think Marvell's business can keep growing faster than most chipmakers. Yet the 2022 to 2025 stretch showed what can happen to shareholders when earnings climb and the valuation falls. Starting at 82 times adjusted earnings, the next decade's returns will probably rest mainly on earnings growth, and they may look much more ordinary than the past decade's.

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