Should You Buy Marvell Technology Stock Before Oct. 6?
Key Points
Marvell Technology has been experiencing strong demand for its chips, as companies invest heavily in artificial intelligence.
The company plans to go over its big growth drivers in its Investor Day event next month.
Expectations are likely to be high, as Marvell's stock trades at a significant premium.
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Shares of chipmaker Marvell Technology (NASDAQ:MRVL) have soared more than 160% this year, with its market cap now at $200 billion. The company has been experiencing a surge in demand due to artificial intelligence (AI), providing customers with an alternative to chips from both Nvidia and Broadcom.
Marvell has a lot of potential upside, with Nvidia's own CEO Jensen Huang saying earlier this year that it could be the next trillion-dollar company. While that encouraging forecast did give the stock a boost, it's still nowhere near joining the trillion-dollar club.
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What may, however, give the stock a further bump up in value is its upcoming Investor Day, which takes place on Oct. 6, as that could result in more positive news and developments for the company's investors to rally around. Is the tech stock worth buying before then?
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Why Oct. 6 could be a big day for Marvell's stock
When a company holds an Investor Day, it can be a positive catalyst for the underlying stock, as it highlights what the business is working on and its long-term growth drivers.
Marvell reported its earnings last month and raised its guidance, as it continues to see exceptionally strong demand for its products. In the second quarter of fiscal 2027, which ended on Aug. 1, the company's net revenue rose by 37%, totaling $2.7 billion. Operating income of $460 million also increased by 35% year over year.
"We are seeing broad-based strength across our data center portfolio, including strong demand in connectivity and a significant acceleration in our custom business beginning in the second half of fiscal 2027," the company stated in the press release announcing the results. It also said it would "showcase" its growth drivers at its upcoming Investor Day event.
Marvell's stock has a lot of upside, but expectations are also high
Marvell has a long way to go in catching up to the top chipmakers in the world, but at the same time, it's also not a terribly cheap stock to own given its level of earnings. It's trading at around 70 times its trailing profits and about 50 times its expected future earnings (according to analyst projections). Heading into Investor Day, expectations will be high, so there's no guarantee the stock will rise after the event.
For long-term investors, however, Marvell could be worth buying now, given the need for alternative chip options as companies continue to invest heavily in AI. But investors should also be wary of the risks of doing so, as Marvell's high valuation does mean there will be some risk with this investment.
Should you buy stock in Marvell Technology right now?
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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom, Marvell Technology, and Nvidia. The Motley Fool has a disclosure policy.
