TradingKey - Marvell Technology closed trading at $241.93 on August 27, marking a record high for Fiscal Q2 results, but slipped during after-hours trading due to the delayed revenue impact for its Google contract for custom semiconductors. Revenue and Data Center growth along with positive forward guidance were positive, although expectations had it moving even faster, and now with MRVL trading below the $254 breakout level, the question is if the focus may shift to stronger AI fundamentals to support the $226 - $232 range.
Record Q2 Results Confirm AI Infrastructure Growth
For Fiscal Q2 2027, Marvell reported total revenue of $2.739 billion, a 37% increase over Fiscal Q2 2026 and a 13% increase over Fiscal Q1 2027. GAAP net income for Fiscal Q2 2027 came in at $308 million, or $0.33 per diluted share, and non-GAAP net income came in at $865.9 million, or $0.94 per share. Operating cash flow was $605.5 million.
Data Center was the main driver. Data Center revenue for Fiscal Q2 2027 came in at $2.172 billion, a 46% increase over the same period last year and an 18% increase from Fiscal Q1 2027. That mix shows that Marvell is more of a vendor of AI infrastructure semiconductors versus a diversified communications semiconductors vendor.
Q3 Guidance and Longer-Term Forecasts Both Rose
For Fiscal Q3 2027, Management advised to expect total revenue of approximately $3.15 billion, plus or minus 5%, and an adjusted EPS of $1.10, plus or minus $0.05. At the midpoint, total revenue would increase by approximately 15% from Fiscal Q2 2027.
For fiscal 2027, Marvell has increased its expected revenue from $11.5 billion to $12 billion. In addition, for fiscal 2028, expected revenue has increased from $16.5 billion to $18 billion. AI-related bookings remain strong, and Murphy expects AI-related revenue will grow even more throughout fiscal 2027.
Google Deal Is Powerful, but the Timing Disappointed
Marvell’s AI demand based sell-off was caused by the timing of the deal with Google. Google can buy Marvell shares at an exercise price of approximately $206.58 per share. Google can buy up to 58.97 million Marvell shares, contingent on the purchase of certain custom Marvell products in the future.
The deal can potentially cover around $120 billion of purchases that qualify through fiscal 2033, but that number is not a guaranteed backlog. As reported by Marvell, the deal will have more significance over the next few years, and in particular, by fiscal 2029. A lot of investors were expecting the deal to have more significant near-term impact, but this was not the case with the sell off.
Custom Silicon and Connectivity Remain the Core Growth Engines
Currently, Marvell expects that their custom silicon business will more than double next year. Marvell has customers in multiple industries, and some have placed large custom silicon orders. Google has added confidence to the company’s goal of reaching $10 billion in annual custom silicon revenue by fiscal year 2029, but more execution and customer focus will be the determining factors over the size of how much deals will be in the future.
Marvell products allow customers to implement large AI clusters, data centers, and cloud computing customers. With the AI ecosystem expanding, especially since Marvell does not provide primary GPUs, the company can expect more spending in that segment.
Technical Setup: $254 Failed, so $226-$232 Becomes the Key Test
Based on the information provided, we had MRVL approaching $241.22 with an upward trendline and $254.06 as the break even level. The last session closed around $241.93, and after hours trading on the earnings release, the stock dropped to a lower level. This means that the break even level of $254.06 was actually resistance as the trading level continues to drop.
Marvell Price Chart - Source: Tradingview
The overall structure is still in play as long as the upward trendline and the moving average zone at $231.97 and $225.85 are intact. This puts the support area $226-$232 in the most important area zone. If this zone is supported by buyers, MRVL has the potential to take another run at $254.06. A clear level break of $254.06 will establish new up level targets of $275.00 and $298.38.
The chart shows neutral to positive momentum, with RSI at 54 and approaching its’ signal line. A breakout and move below $226 is unlikely to be stretched, so we may get our next directional signal from price action on support, and not on momentum extremes. A clear break below the $226 level will set the focus towards the $219.90 level and the broader $204.42 demand zone.
Key Levels
· Last close for 241.93
· After post earnings: around 237
· Immediate resistance: 254.06
· Key support zone: 226 - 232
· Secondary support: 219.90 and 204.42
· Potential upsides: 275 and 298.38
· RSI: approximately 54 (chart supplied), neutral to positive
Why did MRVL fall after strong earnings?
The disappointment among investors was the lack of significant impact until fiscal year 2029 on Marvell’s Google custom-chip agreement. The sell-off was an expectation of timing, reflecting expectations for a more immediate impact from AI demand.
What price level matters most for MRVL now?
The 226 - 232 zone is the most major downside zone. The recovery structure would lose the upside zone if that zone is breached. This zone is currently being held. 254.06 remains resistance for the 275 and 298.38 upside targets.
Bottom Line
Marvell had a strong quarter showing record revenue and a 46% increase in Data Center business. They also raised their guidance and fiscal year outlook for both 2027 and 2028. Based on these things, most would argue for a bullish case. However, that was not the case because of the unrealistic expectations surrounding the Google deal. That leaves MRVL fundamentally stronger, but technically less bullish. 226 - 232 holds a recovery structure while breaking $254.06 provides a case for the upside, while breaking $226 provides a case for the downside and focuses attention on the 219.90 and 204.42 supports.
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