Key Points
A well-known equity research name raised its target price on Marvell Technology stock today.
Simultaneously, a major technology company confirmed it now holds an equity position in this up-and-coming semiconductor outfit specializing in AI data center hardware.
While arguably still undervalued, investors would be wise to let some of the current bullish froth fade a bit before diving in.
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After a few stagnant days, shares of technology outfit Marvell Technology (NASDAQ: MRVL) are back in the bullish mode they were in for most of April. Indeed, up 7.4% as of 12:18 p.m. ET Wednesday, this ticker is now back in record-high territory.
The prod for today's bullishness is two-fold. First, chipmaker Advanced Micro Devices (NASDAQ: AMD) disclosed an equity stake in the smaller semiconductor outfit. And second, Bank of America dramatically raised its target price on Marvell shares.
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BofA and AMD agree it's worth owning
It's certainly not the world's best-known semiconductor outfit. That honor still arguably belongs to Nvidia, or Intel.
Nevertheless, the data center landscape would look considerably different without Marvell Technology's wares. From switches to digital signal processors to storage controllers to custom-built processors, Marvell has carved out a respectably sized share of certain aspects of the artificial intelligence data center industry.
That's what Bank of America is arguing anyway. Already firmly bullish on the stock, this morning, analysts with BofA reportedly raised their target price on MRVL stock from $125 to $200, citing growing demand for its AI networking solutions.
Image source: Getty Images.
Perhaps today's bigger bullish prod, however, is AMD's disclosure that it's made a sizable investment in MRVL stock. Specifically, late Tuesday, Advanced Micro Devices reported it now owns 65,516 shares of Marvell Technology worth approximately $11.6 million.
It's not unheard of for a publicly traded outfit to make such an investment in another company's stock. Given that the two companies are so closely related, however, this move speaks volumes. It could suggest a deeper partnership or relationship is materializing, even if it's not yet clear how it might ultimately manifest.
Right stock, but wrong time to buy
The headlines are bullish to be sure. And, despite the 126% run-up from its early March low, now valued at 46 times next fiscal year's projected per-share profits of $3.83, it's not as if MRVL stock is outrageously overpriced here.
Nevertheless, this ticker is arguably technically overbought right now, and overdue for the same correction the overall market is. It wouldn't be wrong for interested investors to hold out for a better price.
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Bank of America is an advertising partner of Motley Fool Money. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Marvell Technology, and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
