MRVL Declines 8% in 3 Months: Time to Hold or Fold the Stock?

Marvell Technology MRVL shares have lost 8.2% in the past three months, underperforming its Computer and Technology sector, the Zacks Electronics - Semiconductors industry and peers like Broadcom AVGO, NVIDIA NVDA and Micron Technology MU.

Shares of Broadcom and NVIDIA have lost 4.2% and 2.7%, respectively, while Micron Technology shares have surged 52.4%. The Zacks Electronics - Semiconductors industry appreciated 2.7% in the same time frame compared with no change for the Zacks Computer and Technology sector.

MRVL Three-Month Performance Chart

Given this decline in a month, the question arises: Should investors buy, sell or hold the stock at present? Let’s dive deeper into the fundamentals and financials of the MRVL stock to answer this question.

Slowdown in Revenue Growth Rate is a Concern for MRVL

Marvell Technology’s outlook for the fourth quarter of fiscal 2026 signals softer near-term growth. The company guided revenues of $2.2 billion (+/- 5%), representing just 21% year-over-year growth, a slowdown compared to recent quarters. The top line has been in a declining trend for the past three quarters.

Despite strong demand for electro-optics, management expects data center revenues to grow 20% year over year in the fourth quarter, suggesting a decelerating growth rate in the past six quarters. One of the major reasons for this decelerating growth is the growing presence of players like Broadcom and Astera Labs in the AI connectivity space.

Broadcom is strong in networking, data center, broadband, Wi-Fi, Ethernet PHYs and switches. In the communications segment, Broadcom mainly provides high-speed connectivity, optical or wireline networking equipment, cable or broadband IC portfolio, PCIe switch and retimer.

Marvell Technology’s rapid expansion of its portfolio has helped it keep pace with the market trend. MRVL is developing a co-packaged copper system with a 2.5m direct attach cable and a Co-packaged optics switch system. The volume shipments of MRVL’s next-generation 200G per lane 1.6T PAM DSPs are also a tailwind.

The company recently launched the Golden Cable initiative to accelerate and expand the Active Electrical Cable ecosystem for faster deployment of AI infrastructure by cloud and hyperscaler customers. MRVL is also gaining from the adoption of scale-up switches that connect AI accelerators within and across racks, requiring multi-terabit bandwidth and ultra-low latency.

MRVL Leverages Its Peers to Offer AI Products

The rapid growth of AI workload and allied infrastructure has attracted multiple players in this space. Semiconductor giants, including Micron Technology and NVIDIA, are in the AI processing, networking and memory space. Besides semiconductor partners, MRVL has collaborated with Amazon and Microsoft.

Micron Technology has made significant strides in AI-optimized memory solutions, with its HBM3E products gaining attention for their superior power efficiency and bandwidth. MRVL has collaborated with MU on HBM design and integration for AI compute platforms to provide a custom HBM compute architecture.

The growing demand for generative AI and large language models using graphics processing units based on NVIDIA’s Hopper and Blackwell architectures. Marvell Technology has partnered with NVIDIA to integrate NVIDIA’s NVLink Fusion technology into MRVL’s custom cloud-platform silicon solution.

Together with its deep expertise in the AI semiconductor space and strong partner base, the company is able to keep its operating costs low and grow its top line at the same time, hence benefiting from a high growth rate in the bottom line. In the third quarter of fiscal 2026, non-GAAP operating expenses grew just 4% year over year, even as revenues climbed 37% year over year, showcasing disciplined cost management.

The consensus estimate for MRVL’s fiscal 2026 earnings suggests year-over-year growth of 81%. The estimate has remained unchanged for the past 60 days.

MRVL Stock Trades at a Discount

MRVL stock trades at a forward price-to-earnings (P/S) ratio of 6.87, well below the Zacks Electronics - Semiconductors industry average of 8.4, indicating that the stock appears undervalued at current levels.

MRVL Forward 12-Month (P/S) Valuation Chart

Conclusion: Hold MRVL Stock for Now

Although MRVL’s top line is showing a declining growth rate, the company has been able to retain its earnings growth through prudent cost measures. Marvell Technology has strong long-term fundamentals supported by its strong foothold in the data center, deep AI portfolio and high-speed networking space. Considering these factors, we suggest investors retain this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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