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Morgan Stanley analyst Joseph Moore updated his research report on Marvell (MRVL) on May 28. Marvell just delivered a record quarterly report, and management significantly raised the full-year outlook, with Wall Street largely optimistic. Moore is one of the few who did not follow suit, maintaining an equal weight (neutral) rating while raising the target price from $172 to $195—both increases are below the stock price at the time. He believes the AI opportunity is real, but the current price has already accounted for it. For those holding MRVL or looking for targets in the AI chip and optical interconnect chain, it is worth listening to the logic behind this contrarian voice. We have refined and interpreted it.

Three Key Conclusions

① The quarterly report set a record, and management significantly raised the full-year outlook. For the quarter ending April 2026 (Q1 of Marvell's fiscal year 2027), revenue was $2.418 billion, a year-on-year increase of about 28%, slightly exceeding the market expectation of $2.406 billion. Earnings per share were $0.80, in line with expectations. More critically looking ahead: management raised the FY27 full-year revenue outlook to about $11.5 billion, a growth of about 40%, and further increased FY28 to about $16.5 billion, a growth of about 45%. The guidance for the next quarter has a midpoint revenue of $2.7 billion, a year-on-year increase of 35%, exceeding market expectations by about $100 million.

② Moore stays neutral because the stock price has already priced in growth. A target price of $195 corresponds to about 40 times the expected earnings per share for the 2027 calendar year (including equity incentive expense). Moore compared Marvell with its preferred stock Nvidia: both companies have similar stock prices (about $198 vs $212), but Nvidia's expected earnings per share for the next fiscal year is about $13, more than double Marvell's approximately $6. Moore believes that for Marvell to hold its price at this level, there must be continuous evidence of earnings revisions, market share growth, or certainty of large-scale customized chip shipments—none of these three have materialized yet.

③ AI growth has two legs: one is running, and the other is crawling. The fast runner is optical interconnect, with Moore raising the FY27 growth expectation from about 50% to over 70%, with the optical module product line expected to reach an annualized revenue of $1 billion in the coming quarters. The crawling leg is customized AI chips (dedicated chips designed for cloud vendors), and Moore's confidence in FY28 is increasing, but a new major customer won't enter mass production until FY28, and there is currently no visibility for this revenue.

The Logic of Equal Weight: The Opportunity is Real, and the Price is Real

Moore does not question Marvell's AI opportunity; he has raised all three major growth drivers. The issue is that the stock price has run ahead.

The 40 times expected earnings figure is backed by several assumptions that must be realized simultaneously: continuous growth in optical interconnect, a shift from crawling to large-scale shipments for customized chips, and a halt to declines in memory and enterprise business. If any one of these three falters, this valuation multiple will not hold.

Moore specifically compared Marvell with Nvidia in the report. With both companies having similar stock prices, Nvidia's expected earnings per share for the next fiscal year is more than twice that of Marvell, indicating a significant disparity in the earnings base for the same amount of money. This is one of his core reasons for maintaining a neutral stance.

Which Link is Marvell Stuck on in the AI Chain

Marvell does not produce GPUs; it is responsible for moving data between GPUs and cabinets. As AI training clusters grow larger, the amount of data to be transmitted between chips increases, and high-speed optical interconnect becomes more constrained. This is Marvell's strongest area currently, and Moore has the highest visibility here— the optical module product line (acquired from Inphi) is expected to reach an annualized $1 billion in the coming quarters. Another growth point is intra-cluster scale-up optics, growing from about $150 million to over $300 million.

Customized chips represent another logic. Cloud vendors wishing to reduce dependence on a single GPU supplier will seek out Marvell to design their dedicated AI chips. Moore's confidence in FY28 is increasing based on three factors: existing customized chip business, supporting sales, and a new major customer expected to enter mass production in FY28. However, mass production is scheduled for next year, and there is currently no revenue visibility for this year.

On the other end, memory, enterprise data centers, and traditional networks are still under destocking, with no clear recovery trigger points in the short term.

What Morgan Stanley is Betting On, Not Betting On, and Watching

They are betting on the validity of Marvell's optical interconnect logic and sustained demand from AI data centers; the target price increase and revised long-term outlook reflect this. They are not betting on the current stock price having upward potential, so Moore chose neutral instead of overweight.

The signals to watch are threefold: whether the optical module product line can reach an annualized revenue of $1 billion as scheduled in the coming quarters; whether the new major customer's customized chip project can enter mass production and ramp up in FY28; and when memory and enterprise business will show signs of recovery. If any one of these three falls below expectations, the 40 times valuation will need to be recalibrated.

This article is a compilation and interpretation of third-party brokerage research reports by Tide Research. The ratings, target prices, earnings forecasts, and related judgments quoted in the text are solely the views of the brokerage's analysts and represent the positions of their respective institutions, not of Tide Research, and do not constitute any investment advice.

Please note three points while reading: 1. Target prices are analysts' expectations for the next approximately 12 months, which are predictions rather than commitments and may be adjusted repeatedly based on performance and market conditions. 2. Sell-side research reports tend to be optimistic and some covered companies may have investment banking relationships with the brokerage. 3. The value of the research report lies in the main logical line and its underlying assumptions, rather than a specific target price. Focus on the logic, not just the price.

The market has risks, and decisions should be independent. This article should not be used as a basis for buying or selling any securities.

Data source: Marvell fiscal Q1 2027 report (SEC 8-K) · Morgan Stanley research report (Joseph Moore, May 28, 2026) · Public analyst rating summary (MarketBeat, GuruFocus, Benzinga)

Tide Research · TideResearch · June 2026