J.P. Morgan Research Breakdown: Marvell CY28 EPS Targets $11, 14% Above Consensus

Written by: Rita

While the market continues to debate AI ASIC competition and optical communications share, J.P. Morgan has adjusted its CY28 earnings per share forecast for Marvell Technology to $11, surpassing the market consensus of $9.64 by 14%.

On August 24, J.P. Morgan released its forward-looking report for Marvell Technology's Fiscal Year 2027 second quarter (July quarter), reiterating an Overweight rating and noting that its data center growth momentum has only strengthened over the past 90 days.

Google's custom chip collaboration is now in place, AWS Trainium 3 is ramping up, and Microsoft Maia XPU order books are robust, with all three cloud giants appearing simultaneously on Marvell's customer list. J.P. Morgan believes the market has not yet fully priced in the company's full-stack capabilities, ranging from optical DSPs to XPU ASICs and switch chips.

July Quarter Results Expected to Meet or Slightly Exceed Expectations

Marvell Technology's fiscal year 2027 second quarter (July quarter) results are expected to meet or slightly exceed market expectations. Demand for optical DSPs remains strong, with both the 1.6T and 800G generations seeing simultaneous volume growth. The Teralynx 10 switch chip continues to gain customer adoption, and the custom chip business is beginning to benefit from the initial ramp-up of AWS's 3nm Trainium 3 project.

J.P. Morgan expects Trainium 3 shipments to accelerate in the second half of the year, while Trainium 2 will gradually phase out concurrently, facilitating a generation transition. The combined effect of both product generations will significantly drive Marvell's data center revenue. The growth trends for optical DSPs and switches remain equally solid.

October Quarter Revenue Guidance Expected to Beat Consensus

The market consensus for revenue in the third quarter of fiscal year 2027 (October quarter) stands at $3.028 billion. J.P. Morgan anticipates that Marvell's official guidance will approach $3.1 billion, implying a sequential total revenue growth of 13% to 14%. The data center segment is expected to grow even faster, at a sequential rate of 16% to 18%.

Growth drivers stem from four areas: a steeper ramp-up in Trainium 3 shipments, continued robust demand for optical DSPs and switches, expanding opportunities related to XPUs, and the Maia 3nm project progressing as planned. The calendar year 2027 order book for Maia 3nm is already quite solid, and design work for the next-generation Maia 2nm has also commenced.

Data Center Long-Term Guidance Likely to Be Upgraded

The market's focus is on the calendar year 2027 data center revenue guidance. While the current company outlook indicates a year-over-year increase of 55%, J.P. Morgan considers this figure conservative. Driven by six converging factors—continued volume growth of optical DSPs, customer expansion for Teralynx 10, ramping of storage and CXL controllers, scaling of Trainium 3, visibility into Maia deployments, and a widening pipeline of companion XPU chips—the revenue and EPS outlooks for calendar years 2026 through 2028 should exceed current market consensus.

The public realization of the Google partnership further validates Marvell's strategic value within the cloud provider custom chip ecosystem. J.P. Morgan emphasizes that this is not merely a victory for a single XPU project, but rather signifies a comprehensive elevation of the company's standing as an independent chip partner among hyperscale customers.

Portfolio Recommendation and Risk Disclosure

J.P. Morgan reiterated its Overweight rating with a price target of $240. Achieving a CY28 EPS of $11 implies a 14% upside over the current market consensus of $9.64, and this trajectory is becoming increasingly clear.

Risk factors center on several points: any marginal slowdown in AI capital expenditures would directly impact the data center business; shifts in the competitive landscape for ASICs could affect market share; volatility in the optical communications market share requires ongoing monitoring; and high customer concentration remains a structural concern. J.P. Morgan believes these risks have been sufficiently discussed by the market, and current valuations already incorporate a substantial degree of caution, leaving more upside potential than downside risk.

Disclaimer

This article compiles and interprets a third-party brokerage research report (J.P. Morgan, August 24, 2026) alongside publicly available market information by TechFlow Research. The ratings, price targets, earnings forecasts, and related assessments cited herein reflect the views of the brokerage's analysts, represent solely their affiliated institution's position, do not constitute the views of TechFlow Research, and do not constitute any investment advice.

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