Marvell Technology, Inc. (NASDAQ: MRVL) stock is trading lower Thursday in premarket trading as rising Treasury yields and oil prices weigh on technology stocks.
Nasdaq futures fell 0.52%, while S&P 500 futures declined 0.38%, signaling a weaker start for Wall Street.
According to Trading Economics, the 10-year U.S. Treasury yield held near 5.3% Thursday after minutes from the Federal Reserve's September meeting highlighted persistent inflation concerns and the possibility of further interest rate hikes.
Meanwhile, U.S. crude oil prices climbed above $91 per barrel amid renewed tensions with Iran and supply disruptions in the Gulf of Mexico.
Higher borrowing costs and energy prices are raising concerns about inflation, putting pressure on growth-focused technology stocks.
Marvell's Ambitious AI Growth Outlook
Marvell's decline comes after the company outlined ambitious long-term growth projections at its Tuesday investor day.
Marvell expects fiscal 2031 revenue of $70 billion to $90 billion, well above the $46 billion estimate, driven by demand for custom AI chips and data center connectivity products.
However, the stock's 208% rally over the past 12 months and elevated valuation leave it vulnerable to profit-taking as market sentiment weakens.
AI Spending Fuels Growth Expectations
Marvell's outlook reflects growing AI infrastructure spending beyond NVIDIA Corporation (NASDAQ: NVDA) and Advanced Micro Devices, Inc. (NASDAQ: AMD).
Hyperscalers are increasingly investing in custom chips and advanced networking systems, creating new opportunities for Marvell, CNBC reported.
CEO Sees Data Center Revenue Topping $30 Billion
Marvell Chairman and CEO Matt Murphy told CNBC's Jim Cramer on Wednesday that implied 2028 data center revenue now exceeds $30 billion based on current analyst consensus. That is more than double the $15 billion projection discussed two years ago.
Murphy also highlighted rising demand for high-speed optical connections and networking equipment as AI systems become more complex.
He expects agentic AI and reasoning models to increase connectivity requirements as hyperscalers expand their computing infrastructure.
Custom Chip Market Could Reach $235 Billion
Murphy expects the addressable custom silicon market to reach roughly $235 billion by 2030, up from the $40 billion opportunity Marvell identified in 2024.
Marvell projects more than $12 billion in custom silicon revenue by 2028 and aims to reach approximately $30 billion by 2030.
That would represent about 13% of the projected market, which Murphy believes is achievable without capturing an outsized market share.
However, Broadcom Inc. (NASDAQ: AVGO) remains a major competitor as both companies pursue growing demand for custom AI chips and connectivity solutions.
Technical Analysis
Marvell remains in a strong long-term uptrend despite Thursday's premarket decline.
The stock trades about 10% above its 20-day simple moving average (SMA) of $254.13 and 64.5% above its 200-day SMA of $169.88.
Its 20-day SMA also remains above the 50-day SMA of $232.43, reinforcing the bullish trend.
Additionally, the moving average convergence divergence (MACD) indicator remains above its signal line, suggesting positive buying momentum.
Traders are watching $300 as a key resistance level, while $244 represents potential support. A break below support could signal further weakness.
Analyst Outlook
Marvell carries a consensus Buy rating, with an average analyst price forecast of $348.72.
On Wednesday, UBS raised its price forecast to $350, Jefferies increased its forecast to $450, and JPMorgan lifted its forecast to $360. All three firms maintained their bullish ratings.
The stock trades at a price-to-earnings ratio of 94.3, reflecting elevated growth expectations.
MarketDash Edge Rankings
Marvell's MarketDash Edge Rankings highlight strong growth and momentum but a stretched valuation.
Its Momentum score stands at 99.04, while Growth ranks at 99.55. However, its Value score of just 1.42 suggests investors are paying a substantial premium for future earnings.
The combination signals strong investor interest, although elevated expectations could increase volatility if growth disappoints.
ETF Exposure
Marvell is held by several semiconductor-focused exchange-traded funds, including the State Street SPDR NYSE Technology ETF (NYSE: XNTK), First Trust Nasdaq Semiconductor ETF (NASDAQ: FTXL) and YieldMax Semiconductor Portfolio Option Income ETF (NYSE: CHPY).
Recent disclosed portfolio weights were approximately 6.36%, 4.57% and 5.72%, respectively.
These holdings expose Marvell to fund-level trading activity and changes in investor demand for semiconductor stocks.
MRVL Price Action
MRVL Stock Price Activity: Marvell Technology shares were trading lower by 2.07% at $278.85 during premarket trading on Thursday, according to market data.
