Why Marvell Technology Rallied in September

Published: Monday, October 6, 2025 at 2:42 pm

Marvell Technology Stock Surges in September Following Strategic Moves

Shares of Marvell Technology experienced a significant rally in September, climbing 33.7% according to recent data. This positive performance followed a challenging August, where the stock declined 21.8% after the second-quarter earnings report. The initial downturn was attributed to softer-than-expected quarterly guidance from management, citing "lumpiness" in its custom AI XPU business.

However, the stock rebounded strongly in September, driven by several key factors. Investors appeared to maintain a positive long-term outlook for AI, including Marvell's XPU and networking opportunities. Management's actions further bolstered investor confidence. The company announced a new $5 billion share repurchase program, including a $1 billion accelerated share repurchase program. This new program supplements the existing $2 billion program. CEO Matt Murphy emphasized the company's conviction in the business and the intrinsic value of the stock.

Adding to the positive sentiment, four of Marvell's top executives purchased stock on the open market. These insider buys, including purchases by CEO Matt Murphy, Chief Operating Officer Chris Koopmans, Chief Financial Officer Willem Meintjes, and Data Center Group President Sandeep Bharathi, further signaled confidence in the company's future. The share price at the time of these purchases was in the high $70 range.

Marvell's valuation, trading around 30 times this year's adjusted earnings estimates, is considered a relative value within the AI stock landscape. While not inexpensive by traditional standards, it presents a potentially attractive opportunity compared to some other AI-focused companies. However, it's important to note that Marvell's business has some uncertainty compared to other AI names. The company has less-exciting telecom and enterprise communications segments, and its custom XPU business has not been as consistent as that of rival Broadcom.

BNN's Perspective:

The recent surge in Marvell's stock, fueled by strategic share repurchases and insider buying, indicates a strong belief in the company's long-term prospects within the AI sector. While the valuation is not cheap, the relative value proposition and management's confidence are encouraging signs. However, investors should remain mindful of the inherent risks associated with the company's business model, particularly the "lumpiness" in its custom AI XPU business and the less-dynamic performance of its other segments.

Keywords: Marvell Technology, MRVL, stock, shares, AI, artificial intelligence, share repurchase, insider buying, earnings, guidance, XPU, networking, Matt Murphy, valuation, Broadcom

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