UBS revises target downward but retains Buy stance
UBS reduced its price objective for Marvell Technology (NASDAQ:MRVL) to $115.00 from $120.00 while preserving a Buy rating in the wake of Marvell's completion of the Celestial AI acquisition. The new target still implies substantial upside relative to Marvell's most recently reported share price of $74.84 and sits within a broadly bullish analyst community, which shows a 1.69 recommendation score on a scale where 1 denotes Strong Buy.
Valuation context and third-party signals
Data cited from InvestingPro indicates that Marvell may be trading below its Fair Value, with some analysts assigning price targets as high as $156. InvestingPro also provides a suite of additional insights on Marvell's financials and prospects, noting 14 separate items that speak to the company's positioning.
Near-term dilution quantified
The Celestial AI transaction, which closed Tuesday morning, is expected by UBS to exert a dilutive effect on Marvell's earnings in the near term. UBS estimates approximately $0.20 of EPS dilution in fiscal 2027 and roughly $0.16 of EPS dilution in fiscal 2028 versus its prior estimates. UBS frames this as short-term dilution, occurring even though Marvell reports a healthy current ratio of 2.01 and is operating with a moderate level of debt on its balance sheet.
Revenue timing and customer concentration
UBS anticipates Celestial AI will start producing revenue in Marvell's fiscal third quarter of 2028, with Amazon reported as the initial customer. However, UBS does not expect that this top-line contribution will offset the operating expense dilution until the fourth quarter of fiscal 2028.
Updated financial forecasts
On the revenue front, UBS has left its calendar 2026 forecast unchanged at $9.7 billion while increasing its calendar 2027 revenue projection to $12.7 billion from a prior $12.3 billion estimate. Simultaneously, the firm trimmed its EPS forecasts to $3.26 for calendar 2026 (from $3.45) and to $4.69 for calendar 2027 (from $4.76).
Multiple and peer comparison
The revised price target is derived from applying a 25x multiple to UBS's calendar 2027 earnings estimate. UBS notes that this multiple remains below the peer average of roughly 29x and suggests there could be upward pressure on Marvell's multiple if the company successfully executes the Microsoft Maia 300 ramp planned for late 2027. At the time of the report, Marvell trades at a price-to-earnings ratio of 26.42, a metric that InvestingPro characterizes as low relative to the company's near-term earnings growth potential.
Strategic acquisitions and portfolio expansion
Marvell has completed its acquisition of Celestial AI, a specialist in optical interconnect technology. The company says the deal strengthens Marvell's capabilities in high-bandwidth, low-latency connectivity solutions aimed at AI and cloud data center architectures. UBS and company materials indicate the acquisition is not projected to contribute materially to revenue until the second half of fiscal 2028.
Marvell also announced plans to buy XConn Technologies for about $540 million, a transaction structured as a mix of cash and stock and targeted to close in early 2026. Management positions the XConn deal as an expansion of Marvell's switching portfolio.
Brokerage reactions
Following the recent corporate moves, several brokerages have issued or updated ratings: RBC Capital started coverage with an Outperform rating; Raymond James reiterated a Strong Buy after the XConn announcement; and Benchmark maintained a Hold rating after the Celestial AI acquisition.
Implications for investors
UBS's adjustments reflect a trade-off between short-term earnings pressure from acquisition-related costs and longer-term revenue upside tied to product ramps and integration of acquired technologies. The firm’s valuation approach remains conservative relative to peers, leaving room for multiple expansion if operational milestones are met. Investors reviewing Marvell's profile can consult extended research products for fuller analyses and sensitivity scenarios.
Note: This article reports analyst actions, company transactions, forecast adjustments, and valuation multiples exactly as disclosed in the available research and company announcements. It does not introduce additional facts beyond those stated.