Marvell Technology (MRVL) is expected to deliver a fiscal Q2 beat and raise its Q3 guidance, RBC Capital Markets said in a note Wednesday. The Q2 results are due Aug. 27.
"We are looking for a slight beat and 2-4% raise, driven primarily by Optical," the report said, adding that Custom XPU trends also appear solid although tight wafer supply could limit near-term upside.
The note said Marvell has room to raise its fiscal 2028 revenue forecasts by about 5%, driven by continued strength in its Optical business and Amazon (AMZN) deals.
The report also said recent supply agreement with Alphabet's (GOOG) Google is a "significant" positive because it has a total addressable market of over $80 billion, outweighing lingering share shift concerns at Amazon.
"We believe premium valuation is justified," the note said, pointing to custom XPU wins at three US hyperscalers, optical connectivity leadership, and greenfield pipeline opportunities.
RBC kept its outperform rating and a $360 price target.
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