Happy Tuesday afternoon to everyone on The Street. 

And Merry Christmas Eve!

As a reminder, this week, rather than our usual column, “Tomorrow’s Trade Idea, Today”, we’ll be spotlighting “Yesterday’s Top Trade Idea, Today”: a handful of our previous stories that aged like Amazon’s stock.

Remember: past performance is not indicative of future results. But some of these themes are worth keeping on the radar heading into 2025.

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YESTERDAY’S TOP TRADE IDEA, TODAY

This story was originally published on 4/16/2024. Since then, Marvell Technology (MRVL) has risen nearly 64%, for a total YTD gain of 85.5%, outpacing the S&P 500’s gain of just over 24%, as of Friday, December 20.

Built for the Future

Marvell Technology

As the AI train continues to roll along, analysts are pointing to Marvell Technology (MRVL) as a stock to keep an eye on. 

According to UBS analyst Timothy Arcuri, outside of Nvidia (NVDA), it is the “most levered to AI given its broad portfolio and leverage across the data center.”

On Thursday [4/11/24], Marvell announced that it has a new hyperscale customer, rumored to be Microsoft (MSFT), although the company does not disclose its customers.

Upside Potential

Arcuri is predicting that Marvell’s revenue could balloon to $20 billion by 2028 due to opportunities in sectors like automobiles. This opens the door for significant upside potential. 

According to Harlan Sur of JPMorgan (JPM), market share and EPS will also drive upside potential through 2028. Sur predicts that the company is poised to capture 17% of the data center market by 2028. The analyst also expects the stock to have around $6-7$ of EPS in 2028, well above Q1’s EPS of $0.28.

Adjusting Expectations Accordingly

The consensus among analysts is that Marvell is headed for growth. Wells Fargo (WFC) analyst Gary Mobley raised his 2025 estimates for both revenue and EPS due to increasing AI sales expectations. 

That being said, Morgan Stanley (MS) analyst Joseph Moore still thinks NVIDIA is the better AI play. Moore cited Marvell’s sideways movements over the past 12 months and the fact that its multiple is fairly high. 

Marvell is up nearly 17% this year, and analysts have given it an average price target of $88.81. That figure represents more than a 30% upside from Monday’s close. Marvell might be worth a look for investors interested in another stock to ride the AI train.

Original Poll Results

Are you bullish or bearish on Marvell Technology (MRVL) over the next 12 months?

🟩🟩🟩🟩🟩🟩 🐂 Bullish

🟨⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish

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