Marvell’s AI Day Review by Morgan Stanley

Morgan Stanley analysts reaffirmed their Equalweight rating and a price target of $71 for Marvell (NASDAQ:MRVL), following the company’s recent analyst day which highlighted its AI-driven opportunities within networking and custom compute.

The company estimates its AI revenues to escalate to over $1.5 billion/$2.5 billion in 2024/2025 from $550 million in 2023. Although these AI revenue prospects in Marvell's data center and accelerated compute segments are promising, they align closely with previous forecasts—$800 million annual run rate by the end of this year in ASICs and $800 million in optical revenues for 2024— and are consistent with what is already factored into Morgan Stanley's data center growth projections.

From 2023 to 2025, Morgan Stanley expects the data center segment to expand by $2.6 million, with AI contributions accounting for nearly all of this growth. Marvell is well-positioned in optical interconnects, leading in PAM4 DSPs, and its expanding role in custom silicon could present further growth opportunities.