Key Points
Marvell held its annual investor day on Tuesday.
Management is predicting head-turning growth over the next couple of years.
The stock is pricey, but its growth prospects help put the premium in context.
Shares of Marvell Technology (NASDAQ:MRVL) charged sharply higher Tuesday morning, jumping as much as 11%. As of 12:17 p.m. ET, the stock had given back some of its gains, but was still up 3.8%.
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The catalyst that sent the semiconductor and infrastructure specialist higher was the company's robust multi-year outlook, unveiled at its investor day.
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You want chips with that?
Marvell hosted its Investor Day on Tuesday morning, and shareholders seemed to like what they heard. CEO Matt Murphy laid out a compelling case for the company's growth over the next couple of years.
He argued that while Nvidia's graphics processing units (GPUs) still form the backbone of the artificial intelligence (AI) build-out, the biggest hyperscalers and cloud operators are increasingly turning to application-specific integrated circuits (ASICs) customized to their individual workloads to boost efficiency -- ultimately saving time and money. As one of the leading providers of ASICs, Marvell is well-positioned to profit from this trend.
Management backed up its bullish commentary with equally robust guidance that suggests its ongoing growth spurt will continue. Marvell's forecast now calls for fiscal 2027 revenue of $12 billion and fiscal 2028 revenue of $20 billion, representing year-over-year growth of 45% and 50%, respectively.
Murphy went even further, guiding for 2031 revenue that could reach between $70 billion and $90 billion. For context, for the company's fiscal 2026, which ended Jan. 31, Marvell generated revenue that grew 42% year over year to $8.2 billion -- so the company could potentially deliver a roughly 10-fold revenue increase over five years.
Marvell is currently selling for 27 times sales, which most investors would view as pricey. However, if management's forecast is accurate, the stock is selling for just 13 times 2028 expected sales and roughly 3 times the midpoint of management's 2031 guidance. That helps give its valuation some context and illustrates why -- despite its lofty multiple -- Marvell is still worth a look.
Danny Vena, CPA has positions in Nvidia. The Motley Fool has positions in and recommends Marvell Technology and Nvidia. The Motley Fool has a disclosure policy.