MW Why Marvell's beaten-down stock is now seeing a big gain

By Emily Bary

Investors seem to have more confidence in Marvell's custom-chip relationship with Microsoft, according to an analyst

Marvell Technology Inc.'s stock was down more than 30% on the year heading into Wednesday's session, and it was a "favorite" short play in the hedge-fund community, according to Mizuho desk-based analyst Jordan Klein.

But now the stock is surging more than 9% in Wednesday morning action, to about $83, a move Klein attributed to a bullish sell-side report out of Asia that is making investors more confident in Marvell's (MRVL) relationship with Microsoft Corp. $(MSFT.UK)$

Marvell works with technology companies like Microsoft on custom application-specific integrated circuits, but there have been worries on Wall Street about Marvell's competitiveness in the market. Amazon.com Inc. $(AMZN.UK)$ is also a customer, but investors have expressed concerns that Alchip will gain some meaningful share of content in forthcoming Amazon Trainium chips. Taking that potential Amazon issue into consideration, "what would [Marvell] be left with" without Microsoft, Klein wondered.

That's why investors seem encouraged by a recent report from sell-side researcher Fubon that Klein said showed that Microsoft is acknowledging how hard internal chip work is, hence why it reportedly plans to stay with Marvell. Microsoft is also reportedly changing the specifications for its Maia chips, while boosting volumes.

Microsoft and Marvell didn't immediately return MarketWatch's request for comment. MarketWatch has also reached out to Fubon for a copy of the latest report.

"Don't shoot the messenger here, this is Fubon not Mizuho," Klein said, but the math around the Fubon report could mean "massive upside" for Marvell's revenue potential in calendar 2027.

He thinks the move may largely be a reaction to the view that Microsoft "could depend more on [Marvell] for longer in their custom silicon strategy," thus making Marvell's stock "an unattractive short in the $70s," in his view. "Whether you need to buy it in [the] $80s is another debate," he added, but he deems it worthwhile to buy and hold some as the risks seem "well worth the potential upside" in a few years.

-Emily Bary

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July 30, 2025 09:51 ET (13:51 GMT)

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