MRVL

Marvell Technology MRVL shares have gained 8.6% after the company released its second-quarter fiscal 2027 results. The Zacks Electronics - Semiconductors industry and Zacks Computer and Technology have appreciated 5.4% and 1.2%, respectively. Image Source: Zacks Investment Research MRVL stock is trading at a Price-to-Sales (P/S) multiple of 13.31X, higher than the Zacks Electronics - Semiconductors industry’s P/S multiple of 5.23X. Image Source: Zacks Investment Research Given the dynamics, investors must be wondering if it’s the right time to invest, retain or sell the stock. Let’s discuss the fundamentals of the company to get a better insight. Marvell Technology is emerging as a major beneficiary of AI infrastructure spending, with management raising its fiscal 2027 revenue growth outlook to about 40%, implying nearly $11.5 billion in revenues. Fiscal 2028 revenues are expected to increase 45% to roughly $16.5 billion. Data center remains the central engine, accounting for 76% of first-quarter fiscal 2027 sales, while management expects data center revenues to grow about 50% in fiscal 2027 and another 55% in fiscal 2028 annually. Marvell Technology is benefiting from several AI infrastructure growth engines, including custom silicon, interconnect, optics and Ethernet switching. Custom silicon has more than 20 multi-generational socket wins, supporting a broader pipeline beyond individual product cycles. MRVL expects custom revenues to grow more than 20% in fiscal 2027 and double in fiscal 2028. This reflects growing hyperscaler demand for differentiated XPU and XPU-attach solutions as customers increasingly pursue tighter hardware-software co-design across AI infrastructure platforms. Interconnect and optics are also expanding MRVL’s AI opportunity. Management expects the interconnect business to grow more than 70% year over year in fiscal 2027, supported by scale-out PAM ramps and scale-up and scale-across networking contributions. The company expects TIAs and drivers to exceed a $1 billion annualized revenue run rate within the next few quarters. It also sees DCI module revenues reaching about a $1 billion rate during fiscal 2028, highlighting multi-site AI demand. MRVL’s connectivity portfolio is advancing as AI clusters become larger and more complex. The company highlighted strong 800G PAM4 demand and a quick ramp of 1.6T solutions, while Ethernet switching is gaining traction. Its expanded NVIDIA partnership spans optics, NVLink Fusion integration and AI-RAN, potentially widening access to next-generation infrastructure programs. NVIDIA invested $2 billion in Marvell Technology, while acquisitions of Celestial AI, XConn Technologies and Polariton Technologies strengthen scale-up connectivity, memory and silicon photonics capabilities. The growth outlook is supported by improving profitability and cash generation. First-quarter fiscal 2027 non-GAAP operating margin reached 35%, up from 34.2% a year earlier, despite continued investment in AI priorities. Operating cash flow was a record $638.8 million, while Marvell Technology ended the quarter with $3.84 billion in cash and equivalents. The fabless model also supports capital efficiency by relying on foundry and assembly partners, allowing MRVL to concentrate resources on fast-moving AI markets further. MRVL’s rapid AI growth also increases customer concentration and timing risk. Profitability remains sensitive to product mix as newer data center platforms scale. MRVL reported first-quarter fiscal 2027 non-GAAP gross margin of 58.9%, slightly below 59% in the previous quarter. Margins can vary with the pace of custom silicon ramps, competitive pricing and the mix of optics, switching and silicon content. Geopolitical and policy risks remain important because MRVL operates through a global supply chain. The company ships a large portion of its products to China and Taiwan, while only a small portion is shipped to the United States. Evolving U.S. chip export restrictions, tariffs and trade tensions could alter customer purchasing behavior, delay deployments or raise compliance and logistics costs. Competition could pressure pricing and returns, particularly in mature storage and connectivity categories. Broadcom AVGO remains a key competitor in HDD storage SoCs, while MRVL faces broader competition from diversified semiconductor companies across connectivity markets. The company faces stiff competition in the networking and custom silicon space from Astera Labs ALAB and Advanced Micro Devices AMD as well. Broadcom is a leader in the domain of custom silicon solutions for data centers. Broadcom’s advanced 3.5D XDSiP packaging platform is critical to ensure the performance and efficiency of custom AI XPUs. Astera Labs’ Leo CXL smart memory controllers are built for memory expansion up to two terabytes and improve interoperability to accelerate AI performance and cloud computing. Advanced Micro Devices offers semi-custom SoCs and Instinct Accelerators to power data centers. The competition from Broadcom, Astera Labs and Advanced Micro Devices has led MRVL to scale up its product delivery faster. While MRVL is scaling into higher-value AI opportunities, the margin profile can vary with the pace of custom ramp-ups, competitive pricing and the mix of optics, switching and silicon content. The competition also pressures the bottom line. The Zacks Consensus Estimate for MRVL’s fiscal 2027 earnings suggests year-over-year growth of 47%. Estimates have been revised upward over the past 30 days. Image Source: Zacks Investment Research Marvell Technology continues to benefit from the expanding AI infrastructure market, driven by strong momentum in interconnect, switching, custom silicon and optical networking. Nevertheless, a highly competitive landscape with players like Broadcom, Astera Labs and Advanced Micro Devices limits upside in the event of execution missteps. We therefore recommend holding this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report Astera Labs, Inc. (ALAB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the semiconductor manufacturing industry, including Marvell Technology (NASDAQ:MRVL) and its peers. The semiconductor industry is driven by demand for advanced electronic products like smartphones, PCs, servers, and data storage. The need for technologies like artificial intelligence, 5G networks, and smart cars is also creating the next wave of growth for the industry. Keeping up with this dynamism requires new tools that can design, fabricate, and test chips at ever smaller sizes and more complex architectures, creating a dire need for semiconductor capital manufacturing equipment. The 14 semiconductor manufacturing stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.5% while next quarter’s revenue guidance was 6.5% above. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.3% since the latest earnings results. Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos. Marvell Technology reported revenues of $2.74 billion, up 36.5% year on year. This print exceeded analysts’ expectations by 1%. Overall, it was a strong quarter for the company with a significant improvement in its inventory levels and revenue guidance for next quarter beating analysts’ expectations. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 13.6% since reporting and currently trades at $208.53. We think Marvell Technology is a good business, but is it a buy today? Read our full report here, it’s free. Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices Kulicke and Soffa reported revenues of $330.4 million, up 123% year on year, outperforming analysts’ expectations by 5.7%. The business had a stunning quarter with a significant improvement in its inventory levels and a beat of analysts’ EPS estimates. Kulicke and Soffa pulled off the fastest revenue growth in the group. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 16.9% since reporting. It currently trades at $77.99. Is now the time to buy Kulicke and Soffa? Access our full analysis of the earnings results here, it’s free. Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips. KLA Corporation reported revenues of $3.66 billion, up 15.2% year on year, exceeding analysts’ expectations by 1.3%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a beat of analysts’ EPS estimates and a decent beat of analysts’ operating income estimates. As expected, the stock is down 9.3% since the results and currently trades at $172.99. Read our full analysis of KLA Corporation’s results here. Sporting most major chip manufacturers as its customers, Teradyne (NASDAQ:TER) is a US-based supplier of automated test equipment for semiconductors as well as other technologies and devices. Teradyne reported revenues of $1.33 billion, up 104% year on year. This result beat analysts’ expectations by 9.3%. It was a stunning quarter as it also recorded a beat of analysts’ EPS estimates and a solid beat of analysts’ operating income estimates. Teradyne achieved the biggest analyst estimate beat and highest guidance raise of the whole group. The stock is up 5.7% since reporting and currently trades at $338.89. Read our full, actionable report on Teradyne here, it’s free. With customers across the foundry and fabless markets, FormFactor (NASDAQ:FORM) is a US-based provider of test and measurement technologies for semiconductors. FormFactor reported revenues of $258.2 million, up 31.9% year on year. This print surpassed analysts’ expectations by 7.6%. Overall, it was a stunning quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ operating income estimates. The stock is up 15.8% since reporting and currently trades at $96.66. Read our full, actionable report on FormFactor here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Credo Technology Group Holding Ltd CRDO reported stellar performance for the first quarter of fiscal 2027 yesterday, but investors seem wary. Shares are down 10% in pre-market trading today, despite quarterly revenues surpassing management’s guidance and the company maintaining an aggressive growth outlook for the year.Credo continues to benefit from the rapid buildout of artificial intelligence (AI) infrastructure, driving demand for its active electrical cables (“AEC”), optical solutions and retimers.However, the expectations now seem demanding as the next leg of growth hinges on a sharp ramp in the optical business. For investors evaluating CRDO today, the investment debate goes beyond the headline numbers and centers on whether its expanding opportunity set is sufficient to offset the associated execution risks. Credo reported fiscal first-quarter revenues of $479 million, up 10% sequentially and 115% year over year. It also beat the Zacks Consensus Estimate by 0.7%. The company has posted triple-digit year-over-year growth for seven consecutive quarters. Non-GAAP gross margin came in at 68%, compared with 67.6% in the prior-year quarter. Non-GAAP operating expenses increased to $95.2 million from $54.5 million in the prior-year quarter. The increase reflected continued investment in research and developmentNon-GAAP operating income rose to $230.6 million from $96.2 million, producing a non-GAAP operating margin of 48.2%. Non-GAAP net income margin reached 49.3% in the fiscal first quarter, compared with 44.1% in the year-ago quarter, underscoring the company’s ability to convert top-line growth into bottom-line profitability. Non-GAAP earnings per share came in at $1.20, up 130.8% and beat the consensus estimate by 2.6%. Image Source: Zacks Investment Research Cash flow from operations was $90.2 million, down from $92 million sequentially, primarily due to working-capital changes. Capital expenditures were $7.3 million, resulting in free cash flow of $82.9 millionCash and cash equivalents and short-term investments stood at $764.3 million, a decrease of $679 million from the previous quarter due to the cash outlay for the DustPhotonics acquisition.For the fiscal second quarter, management expects revenues between $525 million and $535 million. Non-GAAP gross margin is expected to be between 67% and 69%, and non-GAAP operating expenses are expected to be $100-$105 million. Credo continues to forecast more than 85% year-over-year revenue growth for fiscal 2027, aided by an expected second-half inflection CRDO’s focus on high-performance, energy-efficient connectivity solutions gives it strategic relevance as hyperscalers and cloud service providers overhaul their network architectures.As AI clusters grow to hundreds of thousands of GPUs, connectivity is emerging as a critical constraint. Management highlighted that the challenge is no longer just bandwidth, but also reliability, power efficiency, signal integrity, telemetry and serviceability.Credo believes its system-level approach, which combines silicon, firmware, manufacturing tests and qualification, remains a key differentiator. AEC is a system-level product for CRDO and its core growth engine. The company now has deep relationships with five hyperscalers, alongside expanding engagement with Neocloud customers. Credo continues to see higher AEC penetration within existing customers as deployments scale, while the shift toward 200-gig-per-lane 1.6T ports provides another growth opportunity. The most significant shift in Credo’s business mix is unfolding in its optical segment. Management continues to project more than $600 million in optical revenues, with ZeroFlap optics, silicon photonics PICs and optical DSPs each contributing more than $100 million. Credo added that its optical DSP business generated “record revenues” in the fiscal first quarter. The company also recognized its first silicon-photonics PIC revenues following the DustPhotonics acquisition, with initial wins involving 800-gig and 1.6T optical transceivers.ZeroFlap Optics represents another important opportunity. Management noted that production shipments are underway, and it expects additional fiscal 2027 customer ramps across both 800-gig and 1.6T products involving hyperscalers and Neocloud operators.Beyond AEC and optics, the retimer business is another lucrative opportunity. Management noted that the retimer business also delivered record quarterly revenues, supported by scale-up deployments of Screaming Eagle at 100-gig-per-lane and initial contributions from its 200-gig-per-lane Blue Heron retimer.Longer-term opportunities include Active LED Cables and OmniConnect. Credo continues to expect initial ALC revenues in fiscal 2028. Further, management added that OmniConnect could represent “thousands of dollars of Credo content per GPU”, with revenues also expected to begin in fiscal 2028. CRDO's growth does not come without meaningful risks. In the fiscal first quarter, four customers generated roughly 84% of quarterly revenues. Customer concentration is a major concern as it exposes the company to shifts in customer spending decisions and could materially affect results.Execution risk is another risk factor. Much of the expected growth in fiscal 2027 is dependent on a successful ramp in the optical business. Any delay in deployment or broader industry transitions could affect this ramp.Macroeconomic uncertainties and exposure to the AI investment cycle amid increasing market competition from the likes of Broadcom AVGO, Marvell Technology MRVL and Astera Labs ALAB may also impact CRDO’s growth trajectory. CRDO is trading at a forward 12-month price/earnings ratio of 30.09X, higher than the Electronic-Semiconductors sector’s multiple of 13.31X. Image Source: Zacks Investment Research The market is pricing in the explosive revenue momentum, strong profitability and expanding hyperscaler relationships. However, this leaves very little room for error. Any execution missteps or demand-supply chain troubles could lead to heavy volatility in the stock.In comparison, Broadcom trades at a forward 12-month P/E multiple of 20.64X, while Astera Labs and Marvell are trading at a multiple of 50.99X and 36.69X, respectively.Over the past year, CRDO has gained 65.6%. In comparison, the Electronic-Semiconductors industry, the broader Computer and Technology sector and the S&P 500 are up 46.1%, 27.2% and 19.7%, respectively. Image Source: Zacks Investment Research Investor enthusiasm around AI buildout has benefited other semiconductor stocks as well. Marvell Technology, Broadcom and Astera Labs have gained 237.7%, 22.3% and 58.5%, respectively. Credo's fiscal first-quarter performance reinforces the strength of its fundamental growth story. The company is aligned with one of the most powerful and durable trends in technology, the rise of AI-driven infrastructure. The expanding portfolio is particularly encouraging. Optical DSPs, silicon-photonics PICs, ZeroFlap Optics, retimers, ALCs and OmniConnect could steadily broaden Credo's addressable market and reduce its dependence on a single product category over time.However, customer concentration, increasing expenses and the need to execute a substantial second-half optical ramp leave little room for disappointment.The long-term growth opportunity remains compelling, but the near-term risk-reward warrants some caution. Existing investors may stay put, but new investors would be better off waiting for a favorable entry point. At present, CRDO carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Credo Technology Group Holding Ltd. (CRDO) : Free Stock Analysis Report Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report Astera Labs, Inc. (ALAB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

I hate earnings season. Sure, there are many debit-side options traders that claim to love it and there’s a reason for that — basically, it comes down to the heightened implied volatility (IV). But as Marvell Technology (MRVL) recently demonstrated, this sharp movement is a double-edged sword. You just don’t know what may actually transpire, which is why MRVL stock has given up significant value. At the same time, the red ink presents a contrarian opportunity for bold, data-driven traders. If you’re the risk-tolerant type, MRVL stock may have just provided another chance to scalp some quick profits. Marvell Technology Posts Lower FCF Margins, But Revenue Is Could Surge Next Year - Is MRVL Stock Too Cheap? Option Volatility and Earnings Report For Aug 31 – Sept 4 October Volatility Warning: How Options Traders Can Prepare Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Here’s some background details. On Aug. 12, I stated that Marvell stock may enjoy a quick bounce before its second-quarter earnings report (which was released on Aug. 27). Given that the artificial intelligence boom has been red hot, it was natural to assume that the semiconductor specialist would beat its headline numbers (as was the case). However, despite the strong results on paper, MRVL stock sold off. In the past five sessions, the ticker lost more than 11%. Despite the sales and earnings beat, “investor sentiment turned cautious due to compressed near-term margin guidance,” according to Google Finance’s summary sheet. That was actually one of the first things I said in the aforementioned article: “While major financial disclosures offer robust opportunities, they also carry significant risk. Even if the results are positive, the market may interpret forward guidance in a variety of ways, thus clouding MRVL stock.” Moreover, I pointed to the fact that at the time of publication, the volatility skew hinted at a cautious approach by the smart money. So, there were pre-earnings indicators that suggested Marvell stock could suffer a disappointing performance following its Q2 disclosure. So, why did I highlight the Aug. 21 212.50/220 bull call spread — which was ultimately fully profitable — as a trading candidate? The order flow balance at the time inductively suggested a quick pop was due. Back during Aug. 12, Marvell stock had printed a rare quantitative sequence. In the last 10 weekly sessions, only three of the weekly candlesticks were positive, leading to an overall downward slope across the period. There’s nothing inherently special about this 3-7-D sequence as it’s just a static, discretized factoid. But it’s what tends to happen next that’s intriguing. Since January 2019, the above quant signal has flashed 37 times. On the second week following the signal, MRVL stock has reached the equivalent of the $220 second-leg strike price 18 times (48.6% success ratio) and on the third week (the equivalent of the Sep. 18 expiration date), the hit rate is 17 times (45.9%). While these aren’t what I would call amazing odds, intrepid speculators may have a case in considering the 215/220 bull call spread expiring Sep. 18. With this trade, the breakeven price is set at $217.30. Under the above framework, the expected probability of breaking even would be 56.8% (21 times) for both weeks 2 and 3. That’s a significant detail because Wall Street’s options pricing mechanism implies a probability of profit (breakeven) of only 41.8%. And if you were to reverse engineer Barchart’s Expected Move calculator, the odds of Marvell stock hitting the $220 strike at expiration is only 35.69%. Thus, we have a bit of a dilemma. Through an analysis of historical data and inductive reasoning, I’m coming up with a probability of full profitability of 45.9% on Sep. 18. Who’s right? Honestly, we won’t know until the expiration date rolls around and falsifies the various models used to forecast the MRVL stock price. Since we’re dealing with the unknown future, we’re inherently working with presuppositions. It’s like asking what happens to us when we pass on…nobody knows. Ultimately, we’re just trying to build a cumulative case with what limited evidence we have. However, in my defense, one of the pieces of evidence that we do have is past data — and if we inductively analyze that, there appears to be a rational case for believing in the $220 target. Fundamentally, what separates my probability calculations from Wall Street’s standard mechanism is that I’m presupposing a nonrandom walk. I could be wrong about this but I wholeheartedly believe that the next three weeks will feature nonrandom price discovery. As I said earlier, MRVL stock printed mostly negative weekly candlesticks over the past 10 weeks. In my opinion, that’s going to result in a nonrandom response, particularly because institutional investors may view the wave of red ink as a possible discounted opportunity. If there were an even split between positive and negative weekly candlesticks, I’d be more prone to believing that the future outcome may be random. But the last 10 weeks have overall been sharply negative. With the weak hands having apparently been flushed out, I think there’s a statistical case for a contrarian, positive move. Referencing my Aug. 12 article, the 3-7-D sequence is exactly the reason why I thought that there might be a quick bounce. I’m not guaranteeing a repeat performance, to be sure. Still, if you do want to take another risk, Marvell stock should definitely be on your radar. On the date of publication, Josh Enomoto did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com

NVIDIA Corporation NVDA continues to raise the bar for AI-driven growth. Its second-quarter fiscal 2027 results showed triple-digit revenue and earnings growth, while strong third-quarter guidance points to another record quarter. Demand for AI infrastructure remains robust across hyperscalers, enterprises, AI startups and sovereign customers. With new products expanding its opportunity, NVDA stock appears well-positioned for further gains despite supply constraints. NVIDIA delivered another exceptional quarter, with second-quarter revenues jumping 106% year over year and 18% sequentially to $96.22 billion. Data Center revenues were particularly impressive, rising 117% year over year and 18% sequentially to $89.02 billion. The business benefited from continued strength in Blackwell and accelerating demand from both hyperscalers and its broader AI customer base. Profitability also remained impressive. Non-GAAP gross margin increased to 75% from 72.5% a year earlier, while non-GAAP operating income surged 124% to $63.96 billion. Non-GAAP net income jumped 118% to $53.95 billion, and non-GAAP earnings per share increased 120% to $2.22. NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote In the second quarter, the company generated operating cash flow of $24.08 billion and free cash flow of $21.34 billion. This gives NVIDIA ample flexibility to invest in growth while returning capital to shareholders. It returned approximately $25.78 billion to shareholders through repurchases and dividends during the second quarter. NVIDIA expects third-quarter revenues of $108 billion, plus or minus 2%, implying another sequential increase. The company expects non-GAAP gross margin of 74%, plus or minus 50 basis points. This outlook does not include any Data Center compute revenues from China, suggesting that current expectations are not dependent on a recovery in that market. The outlook is supported by continued Blackwell demand and the rapid rollout of Vera Rubin. NVIDIA began production shipments of Vera Rubin in August, with major hyperscalers and AI infrastructure providers already adopting the platform. The company expects Vera Rubin to account for about 20% of Data Center revenues in the third quarter. NVIDIA's opportunity extends well beyond selling graphics processing units. Its full-stack AI platform includes central processing units, networking, software and complete AI factory systems. The company forecasts that its revenue opportunity per gigawatt has expanded from about $18 billion with Hopper to $25 billion with Blackwell and $40 billion with Vera Rubin. This rising value per deployed gigawatt gives NVIDIA another avenue for growth as AI infrastructure expands. The customer base is also becoming more diversified. Hyperscale revenues surged 117% year over year to $48.71 billion in the second quarter, while ACIE revenues — covering AI clouds, industrial and enterprise customers — jumped 138% to $40.31 billion. Amazon Web Services also announced plans to deploy an additional 2 million NVIDIA GPUs through the second quarter of fiscal 2029, highlighting sustained demand from major cloud providers. NVIDIA expects fiscal 2028 revenues to grow approximately 70%. The company noted that revenue growth expectations for fiscal 2028 are a supply-constrained outlook, meaning demand could be even stronger if more capacity were available. NVIDIA is also investing heavily to secure that supply. Supplier commitments rose to $279 billion at the end of the second quarter, primarily related to memory procurement. The company is further expanding its ecosystem through AI cloud partnerships, financing initiatives and strategic investments. The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 and 2028 revenues indicates year-over-year growth of 85.4% and 2.2%, respectively. The consensus mark for earnings calls for a year-over-year increase of 93.3% for fiscal 2027 and 60% for fiscal 2028. Analysts are also becoming optimistic about the company’s long-term prospects as reflected in their upward earnings estimate revisions over the past seven days. Image Source: Zacks Investment Research Despite its leadership position in the AI chip space, NVIDIA stock has delivered relatively modest gains this year. Shares have rallied 26.7% over the past year, lagging the broader Zacks Computer and Technology sector’s 30.2% rise. The stock has also significantly underperformed several semiconductor peers, including Intel Corporation INTC, Marvell Technology, Inc. MRVL and Advanced Micro Devices, Inc. AMD. Year to date, shares of Intel, Marvell Technology and Advanced Micro Devices have surged 267.9%, 237% and 189.1%, respectively. Image Source: Zacks Investment Research Nonetheless, the positive side of this underperformance is that NVDA stock trades at a discount to the sector’s average. The stock currently trades at a forward 12-month price-to-earnings (P/E) multiple of 17.75. This is below the sector average of 20.76. For a company delivering triple-digit revenue and earnings growth, this valuation gap makes the stock particularly interesting. Image Source: Zacks Investment Research NVIDIA’s valuation is also significantly lower than that of semiconductor peers such as Advanced Micro Devices, Marvell Technology and Intel. At present, Advanced Micro Devices, Marvell Technology and Intel trade at forward 12-month multiples of 38.56, 40.02 and 50.07, respectively. A lower valuation multiple is notable because NVIDIA arguably possesses stronger growth prospects, higher profitability and a more dominant competitive position than many of its rivals. This suggests that investors are not paying an excessive premium for the company’s future earnings potential. If NVIDIA continues delivering strong financial results, the current valuation could leave room for additional upside over the long term. The combination of explosive Data Center growth, strong third-quarter guidance, the Vera Rubin product cycle, rising AI infrastructure spending and expanding customer diversity provides a compelling long-term investment case. NVIDIA's supply constraint is a risk, but it is largely tied to the same powerful AI demand driving growth. With NVDA trading below the broader tech sector's average forward P/E despite its superior growth profile, the stock looks worthy of consideration for investors seeking long-term exposure to the AI infrastructure boom. NVIDIA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Intel Corporation (INTC) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The programs the deal covers in the near term were already inside the targets management had published, and it is connectivity rather than custom silicon that management points to for the raise that did arrive. Marvell Technology (MRVL) reported a record quarter, raised its revenue outlook for fiscal 2027 (by about $500 million) and fiscal 2028, and lost 10.3% of its value in the first session after the report. Coverage of the session named two drivers: softer-than-hoped fiscal 2028 guidance despite the raise, and the timing of an expanded commercial agreement and warrant with a key hyperscaler. The second turns on when that money arrives rather than whether it does. The Warrant Is Already Inside The Targets Through Fiscal 2028 Revenue of $2.74 billion beat the consensus estimate of $2.71 billion, and adjusted earnings of $0.94 a share cleared consensus too. AVGO, NVDA and AMD fell between 0.7% and 4.6% over the same span, so most of the selling was Marvell's own. The agreement covers inference accelerators, storage controllers and network interface controllers attached to the TPU ecosystem, and an analyst on the call sized it at roughly $120 billion of cumulative revenue over six years if every milestone is hit, about $18.5 billion a year annualized, from that one customer's custom-attach programs alone. The guidance does not carry that pace: the same analyst put custom at around $5 billion to $6 billion in calendar 2027. Management's answer: the programs the agreement covers through fiscal 2028 are already inside the custom revenue target the company had published earlier, and the meaningful contribution starts in fiscal 2029. Connectivity, More Than Custom, Paid For The Fiscal 2028 Raise Fiscal 2028 revenue is now guided to roughly $18 billion, up $1.5 billion from the $16.5 billion outlook given one quarter earlier. Custom silicon is part of that, but management calls connectivity the bigger bucket and probably the largest driver, pointing to scale-up optics and switching rather than at the programs the warrant covers. Both sit inside one end market: data center revenue made up 79% of the total, and the company's own risk disclosures flag a rising dependence on a few customers. Concentration of that kind is a different proposition from the Trefis High Quality Portfolio, which does not depend on the handful of largest technology names to produce its returns. The Custom Ramp Reaches Gross Margin First Non-GAAP gross margin was 58.9% in fiscal Q2 2027, and the fiscal Q3 2027 guidance midpoint is 58.0%, a 90 basis point step down that management attributes to the forecast acceleration of its custom business. The CFO's preliminary view is that fiscal 2028 gross margin sits in the same band as the back half of fiscal 2027. The lower-margin part arrives first, though management guides operating margin into its 38% to 40% target range exiting fiscal 2027. October Is Where Fiscal 2029 Gets Its Number Management's fiscal 2029 custom target of more than $10 billion is not a new number: management said it had flagged the figure as far back as its last call and as early as June 2025, after having put custom revenue at $8 billion to $10 billion in April 2024. Management says the warrant biases that target higher but has declined to size the increase before the October 6 investor day. Until then, the case for owning Marvell rests on connectivity execution that is already inside the guide, not on a warrant increment nobody has put a number on. Options currently price Marvell's implied volatility near 60%, in the 56th percentile of its trailing one-year range, a middling reading for how much movement the market is pricing over a year. A Bet On One Build Cycle Is Still One Bet Marvell's story from here turns on how fast a handful of hyperscaler programs move from design to volume, a schedule set by its customers. Investors who would rather hold a rules-based system than a single build cycle can start with the Trefis High Quality Portfolio. That portfolio has a track record of outpacing the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000.

Broadcom AVGO) is scheduled to report results for its fiscal third quarter after-market hours on Wednesday, September 2, with Wall Street looking for another quarter of exceptional growth. This comes as custom AI accelerators, networking chips, and its VMware integration continue to drive the company's expansion. Broadcom has already set a high bar by forecasting another major acceleration in AI semiconductor revenue, although AVGO shares are up a modest 7% year to date but have posted impressive gains of more than 125% in the last two years. Image Source: Zacks Investment Research The Zacks Consensus Estimate calls for Broadcom to post Q3 earnings of $3.22 per share, representing a remarkable 90% increase from EPS of $1.69 in the year-ago period. Quarterly revenue is projected at $29.47 billion, up nearly 85% from $15.95 billion in the prior-year quarter. Wall Street's sales forecast is still in line with management's guidance for roughly $29.4 billion in Q3 revenue, with Broadcom expecting adjusted EBITDA to equal approximately 68% of revenue, underscoring the company's tremendous profitability despite its rapid expansion. The expectations follow a record second quarter in which revenue climbed 48% to $22.18 billion, while adjusted EPS reached $2.44. Broadcom also generated an impressive $10.26 billion in free cash flow, or 46% of quarterly revenue. Notably, Broadcom has exceeded earnings expectations for 21 consecutive quarters with an average EPS surprise of 2.19% in its last four quarterly reports. Image Source: Zacks Investment Research More important than the headline numbers will be Broadcom's AI semiconductor business. After Q2 AI semiconductor revenue soared 143% to $10.8 billion, management expects the figure to reach approximately $16 billion in Q3, representing more than 200% YoY growth. That would also mark a nearly 50% sequential increase in just one quarter. Much of this growth is being fueled by Broadcom's custom AI accelerators, or X Application-Specific Purpose Units (XPUs), and its Ethernet networking portfolio, which allow hyperscalers to build increasingly large AI computing clusters. Broadcom's expanding list of partners is particularly noteworthy. The company has a multi-year partnership with Meta Platforms META) to support Meta’s MTIA custom AI chips, including a next-generation 2-nanometer accelerator. Broadcom is also working closely with OpenAI on custom AI accelerators, including a planned 10-gigawatt deployment and the recently unveiled Jalapeño Intelligence Processor. Furthermore, Broadcom has AI engagements with Alphabet's Google GOOGL) and Anthropic, giving it exposure to several of the world's largest AI infrastructure spenders. Broadcom's growth story extends beyond AI chips. VMware, which Broadcom acquired in 2023, provides virtualization and private-cloud software that allows enterprises to efficiently run and manage applications and computing workloads across their own data-center infrastructure. VMware Cloud Foundation (VCF) is increasingly being positioned as a platform for running traditional applications alongside newer AI workloads and is providing a nice boost to Broadcom’s software revenue. To that point, Broadcom's Infrastructure Software revenue rose 9% YoY to $7.2 billion in Q2, while annual recurring revenue (ARR) increased 17%. Management expects a sharp acceleration in Q3, forecasting Infrastructure Software revenue to increase 31% to $8.9 billion. Broadcom cited particularly strong adoption of VMware Cloud Foundation 9.1, which enables enterprises to run AI inference and Kubernetes, which is a central platform for orchestrating containerized applications and traditional virtualized workloads across Nvidia NVDA), AMD AMD) and Intel INTC) computing platforms. That makes VMware an important complement to Broadcom's booming semiconductor business, adding a recurring, high-margin software revenue stream while also giving the company another way to benefit from growing enterprise AI infrastructure spending. Broadcom occupies an increasingly important position in the AI chip market, but competition remains fierce. Nvidia remains the dominant supplier of general-purpose AI accelerators and is also pushing aggressively into the networking market. Meanwhile, Marvell Technology MRVL) competes directly with Broadcom in custom AI silicon and high-speed data-center connectivity. Broadcom's advantage is that hyperscalers increasingly want customized chips optimized for their own AI workloads, rather than relying exclusively on more expensive general-purpose GPUs. Broadcom doesn't necessarily have to displace Nvidia for its AI business to thrive, as it can capture a growing portion of the enormous AI infrastructure market alongside Nvidia. Broadcom’s outlook remains encouraging, with Zacks projections calling for the chip giant’s annual earnings to increase 72% this year to $11.74 per share versus EPS of $6.82 in fiscal 2025. Plus, FY27 EPS is projected to spike another 63% to $19.10. This comes as Broadcom’s top line is expected to expand over 65% in FY26 and FY27, with next year's sales projections heading north of $175 billion. Image Source: Zacks Investment Research Broadcom enters Wednesday's report with extremely high expectations, but its fundamentals continue to justify much of that optimism. AI semiconductor revenue is projected to exceed $16 billion in Q3 alone, VMware is strengthening the company's recurring software business, and partnerships with Meta, OpenAI, and other hyperscalers provide significant visibility into future AI infrastructure spending. That said, there is certainly execution risk when revenue and earnings are expected to rise at such extraordinary rates, making Broadcom's Q4 outlook especially important. Nevertheless, its expanding custom AI accelerator business and leadership in next-generation networking make Broadcom stock one of the most compelling ways to gain exposure to AI infrastructure growth. With AVGO trading at a reasonable 31X forward earnings multiple, Broadcom stock currently sports a Zacks Rank #2 (Buy), as EPS revisions for FY26 and FY27 are still sharply higher in the last 90 days. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Broadcom Inc. (AVGO) : Free Stock Analysis Report Intel Corporation (INTC) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Nvidia (NVDA) posted a banner quarter on Wednesday that sent a clear message to Wall Street: AI demand is still hot, no matter the doubters. And yet, shares in Marvell Technology (MRVL) — another major chip designer — plunged after its own strong earnings report. The tech trade, strategists told Yahoo Finance, isn't as simple as it once was. Take software, for example. After spending much of 2026 getting hammered by investors, software stocks came roaring back over the past week as the narrative turned away from redundancy and toward resilience. "This earnings season has caused investors to look at the issue of potential AI disruption in software in a little bit more of a nuanced fashion," Steve Koenig, Macquarie US head of software and services research, told Yahoo Finance. "It's all about acceleration," Koenig said. "Acceleration is being treated very positively by investors, and the stocks that can accelerate are getting rewarded." The effect shows up even in the biggest of Big Tech, with some strategists calling the "Magnificent Seven" stalwarts — Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), Tesla (TSLA), and Nvidia — the "Lag Seven" over the past few weeks. Amazon is up 15% over the past month, while Nvidia has picked up 10%. But Alphabet has moved the other way, shedding roughly $692 billion as the stock has fallen 15% from its May all-time high price. Investors have grown increasingly cautious about the Google parent company's significant infrastructure investments amid the departure of top AI talent and concerns that the company is losing its edge. Hyperscalers and others signing massive financing deals to push into the AI build-out offered an example of how the market will eventually discriminate between winners and losers, said Chad Morganlander, senior portfolio manager at Washington Crossing Advisors. "There will be pockets of the market where, [for] unprofitable projects, eventually the debtholders will have to pay the price," Morganlander told Yahoo Finance. There's also the concern that some of the hyperscalers committing to those financial deals — with capex now expected to exceed $1 trillion in 2027 — may not get to spend that money, said F.L.Putnam Investment Management chief market strategist and Portfolio Manager Ellen Hazen. "The biggest risk is whether or not the trillion dollars in hyperscaler capex next year can actually be spent — we have labor shortages, we have permitting delays, we have NIMBY increasing in volume, and we have component shortages," Hazen said. "If we don't get the ability to spend all of that money, then the second derivative slowing," Hazen added. "That's one of the things that I'm concerned about into next year." That said, the chip market is growing, which means more room for players to challenge Nvidia's incumbency, said Moor Insights & Strategy founder, CEO, and chief analyst Patrick Moorhead — including current stragglers such as Alphabet and Marvell. "The market is more than doubling every year, so as a percentage basis, and particularly when you look at the number of chips vs. the revenue, it's a foregone conclusion," Moorhead said. "The No. 1 taker of unit share is the TPU with Google, and all the benefit companies like Broadcom and Marvell and AMD will see in the future." Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at [email protected]. Click here for in-depth analysis of the latest stock market news and events moving stock prices Read the latest financial and business news from Yahoo Finance