Marvell Technology Slips 30% YTD: Should You Hold or Fold the Stock?

Marvell Technology MRVL shares have plunged 31% year to date, underperforming the Zacks Electronics - Semiconductors industry and its peers, including Broadcom AVGO, Qualcomm QCOM and Ambarella AMBA.While Broadcom and Qualcomm shares have returned 14.2% and 3.8%, respectively, shares of Ambarella have lost 11.4% in the same time frame. This steep decline in the share price of this semiconductor leader raises the question: Should investors hold on or exit the stock to minimize losses?YTD Performance ChartImage Source: Zacks Investment ResearchKey Reasons Behind MRVL’s Subdued Stock PerformanceAlthough Marvell is experiencing a massive traction in its AI-focused custom silicon semiconductor business, the margin in this business is fundamentally lower, further affecting MRVL’s total gross margin.Marvell Technology’s custom AI silicon, including XPUs, which are driving its revenue growth, is lowering MRVL’s gross margins due to higher costs associated with manufacturing these chips.The ongoing macroeconomic uncertainties, like the U.S. government’s evolving stance toward China, from where MRVL gained about 43% of its fiscal 2025 total revenues, are also a concern for the company.Investors’ skepticism has also been intensified by the fear of sanctions and persistent tariff threats to China, where Marvell Technology owns research and development facilities.Weakness in MRVL’s consumer end market due to volatility in gaming demand and lumpy order patterns in industrial business has added to investor concerns. However, not everything is gloom and doom for MRVL stock.Marvell’s Product Innovations Make the Stock a Long-Term PlayerMarvell is experiencing massive traction across its product portfolio, which includes custom Application Specific Integrated Circuits, Custom high bandwidth memory Compute Architecture, Co-Packaged Optics Platform and Multi-Die Packaging Platform, driven mainly by proliferation in AI and high performance computing among data centers and hyperscalers.As data centers process more AI-related tasks, they need to improve on networking, interconnect, processing and storage capabilities, requiring high performance semiconductor solutions. Marvell Technology can seize this opportunity and capitalize on this trend with its 800G PAM, 400ZR DCI, and 1.6T PAM digital signal processing products.This is evident in Marvell Technology’s data center segment, which has taken the lead among all its segments with 76% year-over-year revenue growth in the first quarter of fiscal 2026.Marvell Technology also plans to expand its customer base among hyperscaler customers that seek to stand out, cut expenses and want to gain more control over their AI infrastructure. Marvell has collaborated with NVIDIA and leveraged the latter's NVLink Fusion platform to build comprehensive rack-scale AI solutions to meet the needs of hyperscalers.Furthermore, the shift from copper to optical connectivity in AI infrastructure represents a massive growth opportunity for Marvell Technology’s Co-Packaged Optics technology. Marvell Technology is also experiencing a recovery among its enterprise networking and carrier infrastructure segments on the back of the demand rebound.With all these factors at play, the Zacks Consensus Estimate for Marvell Technology’s 2026 revenues is pegged at $8.2 billion, indicating year-over-year growth of 42.6%. The consensus mark for earnings is pegged at $2.79 per share, suggesting a whopping 77.71% year-over-year increase.Image Source: Zacks Investment ResearchMRVL’s Favorable Valuation MultipleThe price drop in stock price has brought Marvell Technology to a forward 12-month price-to-sales (P/S) multiple of 7.43x, significantly below its one-year median of 9.54x as well as the Zacks Electronics – Semiconductors industry’s average of 8.5x.MRVL stock is also trading at a discounted valuation compared to Broadcom. AVGO's forward 12-month P/S ratio of 17.51x, while Qualcomm trades at 3.98x and Ambarella at 7.43x.Marvell Forward 12 Month (P/S) Valuation ChartImage Source: Zacks Investment ResearchConclusion: Hold MRVL Stock for NowMarvell Technology is facing several headwinds, including geopolitical tension, shrunken margins and growing competition across its end markets. However, the company has strong long-term fundamentals supported by its strong foothold in the data center and high-speed networking market.Considering all these factors, we suggest that investors should retain this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant 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 QUALCOMM Incorporated (QCOM): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Ambarella, Inc. (AMBA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks