Melius analysts initiated coverage on Marvell Technology (NASDAQ:MRVL) with a Buy rating and set a price target of $188, citing the company's strong positioning in the rapidly expanding AI infrastructure market and near-term catalysts that could drive growth.

Marvell's strategy revolves around three key pillars: capturing a larger share of the custom accelerator market for leading cloud providers, capitalizing on the "AI halo effect" driving demand for its networking chips, and benefiting from a cyclical recovery in its more traditional segments. The analysts highlighted that Wall Street is underestimating Marvell's potential to achieve its long-term goal of capturing 20% of the custom accelerator market, equivalent to $8 billion in revenue. This growth will likely be fueled by significant contributions from customers like Microsoft, starting in the second half of 2026 and continuing through 2028.

In addition, Marvell's networking chips are positioned to benefit from increased content demand driven by the growth of AI workloads, while its more mature product segments appear to have reached a cyclical bottom, providing a stable foundation for future expansion.

The analysts estimate that Marvell has long-term earnings power of $5 per share, with the potential to exceed $6 as its custom compute and AI pipeline ramps up. This outlook, combined with strong operating leverage and robust free cash flow, positions the company to deliver sustainable growth and reduce its share count over time. The analyst’s $188 price target reflects a price-to-earnings multiple of 40x based on fiscal year 2028 EPS estimates, aligning Marvell with other top-tier AI infrastructure players like Nvidia, Broadcom, and Arista Networks.

In the near term, the analysts see opportunities for Marvell to outperform expectations, particularly in its current quarter ending January. Additionally, an upcoming analyst day in June could serve as a catalyst if Marvell raises its estimates for the addressable market for custom silicon, mirroring recent moves by Broadcom.