Marvell Stock Is Downgraded. Future Sales to Amazon and Microsoft Are Uncertain.

TD Cowen cuts its recommendation on Marvell stock to Hold from Buy. (Dreamstime)

Key Points

• TD Cowen downgrades Marvell Technology to Hold from Buy and cuts its price target to $85 from $90 due to uncertainty in custom processor sales.
• Analysts project Marvell’s data-center revenue to reach $8.2 billion in fiscal 2028, doubling the $4.1 billion reported in 2025.

Marvell Technology’s data-center business has boomed over the last couple of years, but it’s unclear whether the artificial-intelligence chip maker can keep that momentum going, said analysts at TD Cowen.

In a research note, the firm downgraded Marvell stock to Hold from Buy and cut its price target to $85 from $90, citing a lack of certainty around its custom processor sales to big-name partners like Amazon.com and Microsoft .

Marvell stock was falling 1.5% to $82.78 on Wednesday. Shares have dropped 25% in 2025, but they rallied 34% in September in part due to a $5 billion stock buyback authorization.

Marvell’s extended processing unit, or XPU, sales and a strong portfolio of networking silicon have supported its data-center business in recent years. The company announced a five-year deal to supply custom AI products to Amazon Web Services last year and also counts Microsoft as a customer. Amazon is likely the largest contributor to Marvell’s XPU business, TD Cowen said.

But these deals come with too little long-term visibility for the firm’s liking. As Amazon moves to its Trainium 3 custom chip project, Marvell may lose supply share compared to Trainium 2, TD Cowen said. Trainium 2 volumes also could disappoint, putting 2026 and 2027 growth estimates in jeopardy.

“We struggle to reconcile the perpetual and conflicting supply-chain commentary on Trainium 3 at Amazon,” wrote analyst Joshua Buchalter. “This dynamic of volatility and limited visibility is one that we do not expect to go away, and it makes it difficult for investors to model and value Marvell’s stock.”

Revenue from Microsoft’s Maia custom chip project, which is expected to ramp up in 2026, could soften the blow of Amazon share losses, the firm said. The Maia project remains “unproven,” however.

TD Cowen forecasts Marvell’s data-center revenue will total $8.2 billion in fiscal 2028, about double the $4.1 billion reported in 2025 and in line with wider Wall Street estimates. Custom AI accelerators—the products sold to Amazon and Microsoft—contribute an estimated $2.6 billion in that scenario.

But these numbers could vary wildly, the firm argued. Custom accelerator revenue alone could total anywhere from $1 billion to $10 billion “later in the decade,” Buchalter wrote, “with very reasonable assumptions used in each of those outcomes.”

Even with that uncertainty baked in, Marvell still has a solid growth story tied to AI and data centers and a fair valuation today, TD Cowen acknowledged. Wall Street remains largely bullish on the stock. Of the 41 analysts polled by FactSet, 33 rate Marvell shares a Buy or equivalent.

Write to Nate Wolf at nate.wolf@barrons.com