Marvell Technology (NASDAQ: MRVL) presented a new financial outlook at its investor day, saying it expects revenue to reach $20 billion in fiscal 2028 and $70 billion to $90 billion in fiscal 2031. The company also said its total addressable market could expand to $400 billion by 2030, with artificial intelligence and custom chip demand driving that growth.
Fiscal 2028 target has been raised several times
The report said Marvell has repeatedly increased its fiscal 2028 revenue target in recent months. The company first projected $16.5 billion in May, raised that figure to $18 billion in August, and has now lifted it again to $20 billion.
Using an estimated $12 billion in fiscal 2027 revenue, the new fiscal 2028 target would imply 67% year-over-year growth. The report said that pattern points to both a larger operating scale and faster expansion.
Fiscal 2031 goal implies sustained high growth
To reach $70 billion to $90 billion in fiscal 2031 revenue, Marvell would need to maintain a compound annual growth rate of about 52% to 65% over the next several years. The report said that trajectory suggests demand remains strong.
According to Motley Fool, Marvell’s valuation may look elevated in the short term, but its financial profile still shows long-term investment appeal because its growth drivers are clear.
Operating margin target remains at 38% to 40%
On profitability, Marvell CFO Dan Durn said the company is keeping its long-term non-GAAP adjusted operating margin target at 38% to 40%. Based on that range, adjusted operating profit in fiscal 2031 could reach $27 billion to $36 billion.
With Marvell’s current market capitalization at about $255 billion, that works out to roughly 7 to 10 times projected fiscal 2031 operating profit. The report also said Marvell expects an adjusted tax rate of about 13% in fiscal 2028, limiting the effect of taxes on final earnings. Even if revenue reaches only half of the low end of management’s target, the valuation would still sit in a reasonable range.
Custom chip growth is pressuring gross margin
Marvell has continued to expand in custom chips for cloud giants, including a warrant cooperation plan with Google worth up to $120 billion. Still, the report noted that related purchase agreements are largely optional for customers and do not carry binding commitments.
A higher mix of custom chip business is also weighing on gross margin. Marvell expects third-quarter adjusted gross margin to come in at 57.5% to 58.5%, below the previous quarter’s 58.9%. The report added that swings in capital spending could affect the pace at which future revenue targets are met.
Key points highlighted in the report
- Financial targets were raised again: Marvell now sees $20 billion in fiscal 2028 revenue and $70 billion to $90 billion in fiscal 2031 revenue, while its total addressable market is projected to reach $400 billion by 2030.
- Profitability outlook remains intact: with a 38% to 40% adjusted operating margin, fiscal 2031 operating profit could reach $27 billion to $36 billion, implying a relatively moderate valuation multiple against the current market cap.
- Custom chip business brings trade-offs: Marvell is building ties with major technology companies, but purchases are not mandatory, and a larger custom chip mix is weighing on near-term gross margin.