Marvell Technology stock is rebounding today, November 11, as investors continue to buy the dip after the recent sell-off. MRVL rose to $167.50, up 25% from its lowest level last week. Still, the company faces challenges, especially after announcing its $115 billion acquisition of Lumentum.
Marvell Technology is facing headwinds amid Lumentum buyout
MRVL stock has been under pressure in the past few months, moving from a record high of $329 in June to a low of $132 this week. The sell-off has coincided with the ongoing decline of other companies in the data center buildout industry.
Most recently, the stock dropped after the company announced that it would acquire Lumentum in an all-stock deal worth over $115 billion. At the time, the company had a market capitalization of over $250 billion, a figure that has now dropped to $135 billion. Lumentum, the company being acquired, has also dropped sharply, a sign that investors expect the deal to fail.
Marvell Technology stock has also dropped amid rising concerns about the artificial intelligence (AI) industry, with some analysts expecting the bubble to burst. Some of the recent news about the industry have not been encouraging.
For example, Anthropic, a company that was recently considering going public in a $2 trillion deal, is now expected to IPO at a valuation of $1.3 trillion or lower. Recent reporting also suggests that OpenAI’s losses have jumped in the past few quarters.
Marvell’s growth is continuing
On the positive side, the company’s revenue growth is continuing. In its recent results, the company said that its revenue jumped by 37% in the second quarter to over $2.7 billion, with management predicting that the momentum will continue.
Most of this revenue growth came from its data center business, whose revenue jumped by 46% from a year earlier. In the statement, the CEO said:
“AI-related bookings remain exceptionally robust, and we expect our revenue growth to accelerate further through the remainder of fiscal 2027. Given this strength, we are again raising our revenue outlook for both fiscal 2027 and fiscal 2028.”
Analysts tracking the company have maintained a bullish outlook for the company. Yahoo Finance data shows that analysts expect the upcoming third-quarter revenue to jump by 52% in to $3.16 billion. They also expect the fourth-quarter revenue will grow by 68% to $3.74 billion, bringing its annual figure to over $12 billion.
Marvell Technology’s profits are expected to keep growing. Its EPS is expected to jump to $1.1, up sharply from 76 cents, with the annual EPS hitting $4.22.
Most analysts have a bullish outlook for the stock. The average estimate for the stock is $300, up by 94% from the current level. On the other hand, most analysts have recently lowered their outlook after the Lumentum buyout news. For example, Needham lowered its target from $400 to $300, while Wells Fargo sees it falling from $365 to $285. Analysts from Royal Bank of Canada (RBC), Susquehanna, and Cantor Fitzgerald have all lowered their targets.
Marvell Technology stock technical analysis
MRVL stock chart | Source: TradingView
The daily chart shows that the MRVL stock has been in a strong sell-off in the past few weeks, moving from a high of $300 in October to a low of $132. It dropped below the important support level of $163, the neckline of the double-top pattern.
The stock has now retested the neckline. It has now remained below the 50-day and 100-day Exponential Moving Averages (EMA). At the same time, the stock has remained alongside the 61.8% Fibonacci Retracement level.
Therefore, the stock may continue rising in the near term, potentially to the psychological level of $200. In the near term, however, the stock may drop further, potentially to the psychological level of $100.
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