Marvell Stock: Is the Hype Train Finally Leaving the Station, or Are We Still Stuck at the Platform?
Okay, Marvell Technology (MRVL). Let's be real, this stock has been teasing us for ages. Are we finally seeing some actual liftoff, or is this just another false start before it faceplants again?
The Amazon Effect: Real Deal or Fleeting Buzz?
So, Amazon's apparently giving Marvell a "huge boost" because they're using Marvell's Trainium processors. Fine. Amazon can make anything sound like the second coming of Christ. But let's dig into this a little, shall we?
Amazon CEO Andy Jassy is bragging about Trainium2 being a "multibillion-dollar business," growing 150% quarter-over-quarter. Okay, great. But what does that actually mean for Marvell's bottom line? Is this just Amazon patting themselves on the back for something Marvell is barely profiting from? I mean, Amazon's known for squeezing suppliers until they bleed.
And this "Project Rainier supercomputer" with half a million Trainium2 chips sounds impressive... until you remember that Amazon probably got a screaming deal on those chips, maybe even below cost, just to lock in a long-term supply.
J.P. Morgan analyst Harlan Sur is all excited, slapping a $120 price target on MRVL. Analysts, man. They're always "overweight" on something. It's their job to pump stocks, not give you the straight dope.
But here's a question nobody seems to be asking: what happens when Amazon decides to bring chip manufacturing in-house? They've got the cash, the talent, and the sheer bloody-mindedness to do it. Then where does that leave Marvell? Stranded, that's where.
Beyond Amazon: Is There Anything Else Cooking?
Marvell's CEO, Matt Murphy, is out there spinning a yarn about how their data center business is now 75% of their revenue, up from 34% two years ago. Okay, that sounds good on paper. But how much of that is actually profitable growth, and how much is just shuffling deck chairs on the Titanic?
And this electro-optics business they got when they acquired Inphi? Supposedly, it's grown from $600 million to $3 billion. He thinks this business alone deserves "premium valuation multiples." Every CEO thinks their stuff deserves premium valuation multiples. Give me a break.
He's also bragging about "over 20 multigenerational custom design wins" worth $75 billion in lifetime revenue. Lifetime revenue? That's like saying you're going to win the lottery every week for the next 50 years. Maybe it'll happen, but I ain't holding my breath.
Oh, and they are buying back $5 billion in shares. Shares buyback programs are typically a sign that the company's leadership believes its stock is undervalued offcourse.
Then again, maybe I'm just being cynical. Maybe Marvell really is turning into an AI powerhouse. But color me skeptical until I see some real, sustained profits, not just hype and promises.
The Market's Verdict: Still on the Fence
So, what does the market think? Well, the stock was up 6.1% recently. That's something, I guess. But it's still down 17% year-to-date! That's trailing the market by a mile.
And the analysts? They're all over the place. Some say "strong buy," some say "hold." The average price target is just slightly above the current price. In other words, nobody really knows what's going on.
Wall Street Zen raised Marvell Technology from a "hold" rating to a "buy" rating in a report on Saturday, September 13th. What do they know that we don't?
