Marvell Technology Inc. (NASDAQ:MRVL) stock traded lower by about 2% Friday, bucking a modestly positive broader market. The Nasdaq rose 0.02%, while the S&P 500 gained 0.26%.
The decline comes after a strong 12-month run for Marvell. Investors are also positioning ahead of the chipmaker’s earnings report next week.
With major indexes trading higher, Marvell’s decline appears more stock-specific than part of a broader risk-off move.
Earnings are also approaching. Marvell is scheduled to report results Aug. 27. That could prompt some investors to reduce risk before the announcement.
BMO Sees Marvell Gaining Ground In AI Infrastructure
A bullish analyst call added to the focus on Marvell’s longer-term AI and data center growth prospects.
BMO Capital Markets analyst Harsh Kumar initiated coverage of Marvell on Friday with an Outperform rating and a $250 price forecast. Kumar highlighted the chipmaker’s strong position in data center infrastructure and optical networking.
Kumar called Marvell a leading semiconductor supplier for data center infrastructure. He also highlighted its optical networking products for hyperscalers and enterprise customers. In addition, Marvell is emerging as a strong competitor in custom ASICs.
The analyst pointed to Marvell’s leadership in storage controllers and optical interconnects. He said its position in optical connectivity is supported by its technology, unit volumes and digital signal processor business.
Kumar also sees additional growth ahead. He said Marvell’s XPU business is accelerating, while revenue from new switch and co-packaged optics, or CPO, products is starting to ramp.
Technical Analysis
Marvell remains in a longer-term uptrend. The stock is trading above its 20-day simple moving average of $210.89, 50-day SMA of $234.04, 100-day SMA of $204.97 and 200-day SMA of $145.12.
However, the 20-day SMA remains below the 50-day SMA. That bearish crossover could keep near-term trading volatile despite the broader uptrend.
Meanwhile, the MACD is above its signal line, and the histogram is positive. That points to improving momentum and suggests buyers are regaining some control.
Key support: $244 is a nearby level to watch. A break below that area could put additional pressure on the stock.
Earnings And Analyst Outlook
Marvell is scheduled to report earnings Aug. 27.
Wall Street expects earnings of 87 cents per share, up from 67 cents a year earlier. Analysts expect revenue of $2.71 billion, compared with $2.01 billion a year ago.
The stock trades at a price-to-earnings ratio of about 86.3, reflecting a premium valuation.
Marvell carries a Buy consensus rating with an average price forecast of $276.52.
On Friday, Oppenheimer maintained an Outperform rating and raised its price forecast to $300. BMO Capital Markets initiated coverage with an Outperform rating and a $250 price forecast. UBS maintained a Buy rating Thursday and raised its price forecast to $310.
Benzinga Edge Rankings
The Benzinga Edge scorecard highlights Marvell’s strong growth and momentum but weak value.
Marvell scores 98.98 for momentum and 99.79 for growth. However, its value score stands at just 1.16.
The combination reflects strong market momentum and growth expectations alongside a premium valuation. That could leave the stock more sensitive to earnings results or changes in investor expectations.
Top ETF Exposure
Marvell has significant exposure through several technology and semiconductor ETFs. The Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) has an 8.20% weighting in the stock.
The State Street SPDR NYSE Technology ETF (NYSE:XNTK) has a 5.69% weighting, while the Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ) has a 5.12% weighting.
As a result, sizable inflows or outflows from these funds could contribute to buying or selling pressure in Marvell shares.
MRVL Price Action
Marvell Technology shares were down 1.86% at $246.33 at the time of publication Friday, according to Benzinga Pro data.
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