Goldman Sachs Comments on Marvell’s Quarterly Report: Perfectly Matches Wall Street Expectations—Keep a Close Eye on These Three Key Areas Next!

Marvell Technology has delivered a quarterly report closely matching Wall Street's expectations, and boosted market confidence with guidance for next quarter that exceeded forecasts. Management simultaneously hinted at raising full-year guidance for FY27/28. Goldman Sachs believes the stock price is likely to rise moderately in the short term, but medium- and long-term performance will depend on the evolution of three core variables.

According to Chasewind Trading Desk, Goldman Sachs’ latest research report points out that Marvell’s first fiscal quarter revenue reached $2.418 billion, closely matching Goldman Sachs’ forecast of $2.396 billion and Wall Street’s consensus of $2.412 billion, representing a year-over-year increase of 27.6% and a quarter-over-quarter increase of 9.0%. Meanwhile, the company's revenue guidance midpoint for the second fiscal quarter is $2.7 billion, exceeding Goldman Sachs' forecast by 3.4% and Wall Street's consensus by 3.0%, showing a clear beat. Management also signaled an upward adjustment for the full-year FY27/28 guidance, but did not disclose specific numbers.

Goldman Sachs points out that, given strong earnings from peer companies and sustained high capital expenditure from core customers, market expectations for Marvell were already high ahead of this earnings release. Against this backdrop, the above-expectation guidance can still moderately drive the stock price higher, reflecting the company’s resilience in its fundamentals. Goldman Sachs currently maintains a neutral rating for Marvell, with a 12-month target price of $125, which implies about 40% downside from the stock price of $208.26 at the time of the report.

Quarterly report metrics fully meet expectations

All key financial metrics for Marvell’s first fiscal quarter were closely aligned with Goldman Sachs and Wall Street forecasts. Revenue of $2.418 billion was up 0.9% from Goldman Sachs’ forecast and 0.2% above Wall Street consensus. Among these, Data Center revenue was $1.833 billion, exactly in line with both forecasts; Communications and other business revenue was $585 million, beating Goldman Sachs' forecast by 2.8% and Wall Street consensus by 0.8%, making it one of the sources of modest outperformance this quarter.

Profitability remained robust. Non-GAAP gross margin was 58.9%, 15 basis points above Goldman Sachs’ forecast and 7 basis points above Wall Street consensus; Non-GAAP operating margin was 35.0%, matching Wall Street consensus and 27 basis points above Goldman Sachs’ forecast; Non-GAAP EPS was $0.80, exactly in line with Wall Street consensus, and $0.01 higher than Goldman Sachs’ forecast.

Second quarter guidance beats across the board

Marvell’s guidance for the second fiscal quarter exceeded market expectations in revenue, gross margin, and EPS. Revenue guidance midpoint is $2.7 billion, with range from $2.565 billion to $2.835 billion, 3.4% above Goldman Sachs' forecast and 3.0% above Wall Street consensus, implying year-over-year growth around 34.6% (at the upper guidance) to 30.1% (at the lower guidance).

The non-GAAP gross margin guidance midpoint is 58.75%, 25 basis points above Goldman Sachs’ forecast and 16 basis points above Wall Street consensus; Non-GAAP EPS guidance midpoint is $0.93, 2.8% above Goldman Sachs’ forecast and 1.8% above Wall Street consensus. Operating expense guidance is $600 million. Management also stated that FY27/28 full-year guidance has room for upward adjustment, but no quantified data was given.

Three core variables to dominate future performance

Goldman Sachs believes Marvell’s medium-term stock performance will depend mainly on three key topics, and expects investors to focus on these in the earnings call.

First, updates to the data center revenue growth targets. The market will closely watch whether management gives clearer quantitative guidance for CY2026/27 data center revenue growth targets, which will directly affect market pricing for the long-term growth potential of the company’s AI infrastructure business.

Second, potential progress in cooperation with Google on ASICs. Management’s comments on potential partnership with Google on ASIC chips will be a key highlight of the call. The customer expansion in custom computing chips business is closely related to Marvell’s competitive landscape and market share in the AI chip sector.

Third, the impact of Agentic AI on fundamentals. As AI applications move from inference to autonomous agents (Agentic AI), the market wants to understand how this trend will specifically affect Marvell’s product demand, revenue structure, and long-term growth path.

Goldman Sachs maintains Neutral rating, $125 price target

Despite the solid performance in the quarterly report and guidance above expectations, Goldman Sachs still maintains a neutral rating for Marvell, with a 12-month target price of $125, based on a 28x P/E multiple and normalized EPS estimate of $4.50, which implies about 40% downside from the current share price of $208.26.

Goldman Sachs forecasts Marvell’s revenue will rise from $8.195 billion in FY26 to $11.117 billion in FY27, $15.356 billion in FY28, and $19.615 billion in FY29; corresponding EPS estimates are $3.27, $5.00, and $6.96 respectively.

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The above highlights are from Chasewind Trading Desk.

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