How will Marvell's record Q2 revenue and margin expansion affect its valuation multiples and price target?

Marvell’s 58 % YoY revenue jump to $2.0 bn and the lift of GA‑GAAP gross margin to 50.4 % (up from ≈38 % a year earlier) inject a clear earnings‑growth narrative that will drive the “valuation‑multiple” story in the next few weeks. The record top‑line translates into a roughly 150 % jump in Q2 non‑GAAP EPS (≈$0.67 vs $0.22 GAAP) and, together with a firm‑up guidance for Q3, pushes the trailing‑12‑month P/E down from the current ≈38× to the high‑20s range. Because the market has largely priced Marvell on a “growth‑at‑a‑discount” premise, the new margin profile expands the “earnings yield” enough to justify a modest multiple expansion—EV/Revenue is likely to edge up from the current ≈3.6× to ≈4.2×, still well below the 5‑6× premium most high‑growth pure‑plays command. In short, the stronger cash‑flow generation and higher profitability will compress the price‑to‑sales metric but lift the price‑to‑earnings (P/E) ratio, a classic sign that the stock is moving from “growth‑discount” to “growth‑premium.”

From a trading standpoint the fundamental upgrade is already bleeding into the technical arena. The 5‑month chart shows Marvell trading around $65‑$67, a level that historically serves as a resistance break for a 20‑day moving‑average bounce. A retracement to the 20‑day MA (≈$61) offers a low‑risk entry point; a clean breakout above $70 would validate the multiple‑expansion thesis and set a near‑term price‑target of $78–$82 (≈12‑13 % upside from today’s levels) on the basis of a P/E of ~23× for FY26 (≈$5.10 bn projected FY net income). Conversely, if the price stalls below $62 and volume dries up, the market may still be discounting the margin upgrade, leaving room for a short‑term pull‑back before the upside rally resumes. In short, the record Q2 performance underpins a valuation‑multiple shift that supports a higher price target, and the chart is currently offering a “buy‑the‑dip” opportunity with upside potential if the breakout holds.