MRVL · Forward model · Bear case
The Bear case, 20 quarters out
Model as of
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
Quarters carry Marvell's own fiscal labels: 2027 Q2 is the fiscal second quarter ENDED 1 August 2026, reported after the US close on 27 August 2026, and fiscal Q4 ends in late January. What Marvell discloses is exactly two end markets - data center and communications and other - and they still sum to the dollar to reported net revenue in all ten quarters carried here: $2,171.5M + $567.8M = $2,739.3M against a reported $2,739.3M in the basis quarter, straight off the Quarterly Revenue Trend table in Exhibit 99.1. The disclosure has NOT been withdrawn; the same table, the same two lines, the same reconciliation. Marvell runs ONE reportable segment and the CODM assesses performance on consolidated net revenue, so there is still no disclosed margin, opex or capex by end market: the two margin lines and the two capex intensities on this page are the author's, calibrated so the consolidated result reproduces the reported quarter, and are not company data. The two earliest communications quarters (2025 Q1 and 2025 Q2) are marked estimated because they are our own sum of the four legacy end markets - enterprise networking, carrier infrastructure, consumer, automotive and industrial - that Marvell later combined into the single line; every later quarter, this one included, is the reported figure. What is NOT split, and is not invented here: custom XPU silicon versus electro-optics versus switching versus storage inside data center. Marvell publishes no XPU units, ASPs, wafer allocation or backlog, so a unit or capacity driver on this line would be fabrication and both verticals run on plain growth rates. Margins are stated on Marvell's non-GAAP basis and the consolidated starting margin moves to 36.6%, the non-GAAP operating margin actually reported in the basis quarter, from 35.0% at the previous basis. Corporate overhead is where this roll-forward deliberately leaves a wound open: stock compensation was $326.2M in the basis quarter, 11.9% of revenue, against $207.6M and 8.6% one quarter earlier, and the overhead rate on this page is STILL 8.6%. It was not moved, because overhead is on the do-not-touch list for a mechanical roll-forward, so this model now under-charges a real and dilutive cost by about 3.3 points of revenue - roughly $90M in the basis quarter alone - and a future revision should settle it. The consequence is visible: free cash flow in the first projected quarter is 20.8% of revenue against the 17.5% actually reported, where at the previous basis the model sat just under the reported figure. Acquisition amortisation of $214.9M a quarter is still NOT charged, which is why this model values a company that earned $308.0M of GAAP net income on $865.9M of non-GAAP net income. Share count moves to the 921.2 million diluted shares in the release, guided to about 921 million again for fiscal 2027 Q3, and still does not grow for the three live dilution overhangs - NVIDIA's $2.0B convertible preferred, the Google warrant (up to 58,970,907 shares at $206.58) and Celestial AI contingent consideration payable partly in stock through fiscal 2029. Diluted shares went from 870.4M to 921.2M year on year, +5.8%, against $400.0M of buybacks in the first half; holding the count flat is an assumption the last four quarters argue with. The reference price of $241.45 is the 27 August 2026 close, which is BEFORE the market saw the print: the stock traded down 5.7% to $227.80 after hours on the gross-margin guide, the communications decline and the capacity prepayments. Seasonality was tested on both verticals and carried on neither; the method and the numbers are in each vertical's notes.
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Latest: $4.62B (2032Q2E)
| Period | Value |
|---|---|
| 2025Q1 | $1.16B |
| 2025Q2 | $1.27B |
| 2025Q3 | $1.52B |
| 2025Q4 | $1.82B |
| 2026Q1 | $1.90B |
| 2026Q2 | $2.01B |
| 2026Q3 | $2.07B |
| 2026Q4 | $2.22B |
| 2027Q1 | $2.42B |
| 2027Q2 | $2.74B |
| 2027Q3E | $3.10B |
| 2027Q4E | $3.46B |
| 2028Q1E | $3.78B |
| 2028Q2E | $4.06B |
| 2028Q3E | $4.28B |
| 2028Q4E | $4.45B |
| 2029Q1E | $4.58B |
| 2029Q2E | $4.67B |
| 2029Q3E | $4.73B |
| 2029Q4E | $4.77B |
| 2030Q1E | $4.80B |
| 2030Q2E | $4.80B |
| 2030Q3E | $4.80B |
| 2030Q4E | $4.79B |
| 2031Q1E | $4.77B |
| 2031Q2E | $4.74B |
| 2031Q3E | $4.72B |
| 2031Q4E | $4.69B |
| 2032Q1E | $4.66B |
| 2032Q2E | $4.62B |
Where each case comes from
Google warrant case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Google warrant column is what happens if they are taken at face value.
The warrant itself
- Aug 19, 2026 the Company issued to Google a warrant to purchase up to an aggregate of 58,970,907 shares of common stock of the Company at an exercise price of $206.58 per share
- Aug 19, 2026 The remaining Warrant Shares vest based on discretionary purchases from the Company's third quarter of fiscal 2027 through the end of the Company's fiscal year 2033 by or on behalf of Google and its affiliates in 240 equal tranches, with one tranche vesting for each $500 million in Custom Products revenue.
What the company has actually guided, for scale
- Aug 27, 2026 As a result, we now expect overall Marvell revenue in fiscal 2027 to grow approximately 45% year over year to roughly $12 billion, up from our prior outlook of approximately $11.5 billion just one quarter ago.
- Aug 27, 2026 Net revenue for the second quarter of fiscal 2027 was $2.739 billion, $39.0 million above the mid-point of the Company's guidance provided on May 27, 2026.
- Aug 27, 2026 Net revenue is expected to be $3.150 billion +/- 5%.
From cash flow to fair value
The published model, discounted at 12.0% a year with an exit multiple of 4.0x on revenue. The horizon and sliders above do not change this walk.
| Present value of free cash flow, 20 quarters | $10.76B |
| Terminal-year revenue | $18.68B |
| Terminal-year EBITDA | $4.32B |
| Exit multiple, on revenue | 4.0x |
| Terminal value | $74.74B |
| Discounted at 12.0% a year, terminal value becomes | $42.41B |
| Share of enterprise value from the terminal | 80% |
| Enterprise value | $53.17B |
| Net cash | −$1.03B |
| Equity value | $52.14B |
| Shares | 0.92B |
| Fair value per share | $56.60 |
| Against the deployed price of $264.21, as of | −79% |
The exit multiple is the whole argument, and it is an assumption with no verified comparable set behind it. 6.2 times terminal revenue is 22.1 times this model's own terminal EBITDA, because the last four projected quarters carry $27.4B of revenue at a 28.1% EBITDA margin after the stock-compensation charge. That is deliberately generous for a business the model has slowed to 6.6% year-on-year growth by the final quarter - and that slowing is steeper than at the previous basis, because fitting the raised fiscal 2027 and fiscal 2028 data-center guidance off a 22.6% basis quarter required a faster decay. At a 10% discount rate the base case is $132.79 a share, from $146.22 at the previous basis, measured against the $241.45 close of 27 August 2026. The sensitivity is one-sided: 4x terminal revenue is $92, 6.2x is $133, 8x is $166, 10x is $203 and it takes about 12.1x - roughly 43 times terminal EBITDA, for a company by then growing at under 7% - to reach the reference price, against 10.9x at the previous basis. Moving the discount rate does almost nothing by comparison: 8% gives $145 and 13% gives $117. So the honest statement of this page is unchanged: the operating path is close to management's own, now including a raised one, and the gap to the price lives entirely in what a $27B-a-year Marvell should be worth. What this valuation does NOT charge: stock compensation above the 8.6% overhead rate the previous revision set, which the basis quarter ran at 11.9%; acquisition amortisation of about $215M a quarter; cash interest of about $62M a quarter on the $4.96B of debt (free cash flow here is pre-interest, with the $1.03B of net debt netted off the equity instead); the roughly $1B of fiscal 2027 capacity prepayments to suppliers, which are an operating cash outflow this model never sees; the Celestial AI contingent consideration payable in cash and stock through fiscal 2029; and any growth in the share count from the NVIDIA preferred, the Google warrant or ordinary equity compensation.
Read the other way round: at $264.21 the market is paying 22.0x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
The published model's 20 quarters. The horizon and sliders above do not change this table.
| Quarter | Data center | Communications and other | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|
| 2027 Q3E | $2.62B | $481M | $3.10B | +50% | $713M | $144M | $507M | +66 | $493M |
| 2027 Q4E | $3.03B | $430M | $3.46B | +56% | $796M | $161M | $564M | +72 | $533M |
| 2028 Q1E | $3.39B | $398M | $3.78B | +56% | $870M | $178M | $616M | +73 | $566M |
| 2028 Q2E | $3.68B | $376M | $4.06B | +48% | $933M | $192M | $660M | +64 | $589M |
| 2028 Q3E | $3.92B | $361M | $4.28B | +38% | $984M | $203M | $695M | +54 | $603M |
| 2028 Q4E | $4.10B | $349M | $4.45B | +28% | $1.02B | $212M | $723M | +45 | $610M |
| 2029 Q1E | $4.24B | $339M | $4.58B | +21% | $1.05B | $220M | $743M | +37 | $610M |
| 2029 Q2E | $4.34B | $331M | $4.67B | +15% | $1.08B | $225M | $758M | +31 | $604M |
| 2029 Q3E | $4.41B | $324M | $4.73B | +11% | $1.09B | $229M | $768M | +27 | $595M |
| 2029 Q4E | $4.46B | $317M | $4.77B | +7% | $1.10B | $231M | $775M | +24 | $584M |
| 2030 Q1E | $4.48B | $311M | $4.80B | +5% | $1.11B | $233M | $778M | +21 | $570M |
| 2030 Q2E | $4.50B | $305M | $4.80B | +3% | $1.11B | $234M | $779M | +19 | $555M |
| 2030 Q3E | $4.50B | $300M | $4.80B | +1% | $1.11B | $234M | $778M | +18 | $539M |
| 2030 Q4E | $4.49B | $294M | $4.79B | 0% | $1.11B | $234M | $776M | +16 | $522M |
| 2031 Q1E | $4.48B | $289M | $4.77B | −1% | $1.10B | $233M | $773M | +16 | $506M |
| 2031 Q2E | $4.46B | $284M | $4.74B | −1% | $1.10B | $232M | $769M | +15 | $489M |
| 2031 Q3E | $4.44B | $279M | $4.72B | −2% | $1.09B | $231M | $765M | +15 | $473M |
| 2031 Q4E | $4.41B | $274M | $4.69B | −2% | $1.08B | $230M | $760M | +14 | $456M |
| 2032 Q1E | $4.39B | $269M | $4.66B | −2% | $1.08B | $229M | $755M | +14 | $441M |
| 2032 Q2E | $4.36B | $265M | $4.62B | −3% | $1.07B | $227M | $750M | +14 | $425M |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Fair value then | Note |
|---|---|---|
| 2026-08-27 | $146.22 | First cut, built on the fiscal 2027 Q1 release of 27 May 2026 and the research brief of 26 August 2026. Two verticals because Marvell discloses exactly two end markets and one reportable segment: data center on a decaying growth rate calibrated to the guided 50% and 55% fiscal 2027 and 2028 data-center growth, and communications and other grown from its own sequentials rather than backed out as a residual. Seasonality was tested on both lines by ratio to a centred four-quarter moving average and carried on neither. |
| 2026-08-31 | $132.79 | Mechanical roll-forward onto fiscal 2027 Q2, the quarter ended 1 August 2026 and reported after the close on 27 August 2026. The previous revision was dated the morning of that print and did not carry it: its asOf read 2026-08-27 while its last actual was still the quarter ended 2 May 2026, so the page looked current by date and was one quarter behind by content. Both verticals gain the reported quarter from the Quarterly Revenue Trend table in Exhibit 99.1 - data center $2,171.5M, communications and other $567.8M - and they still reconcile to the dollar against reported net revenue of $2,739.3M. The end-market disclosure has not been withdrawn. What moved: basis and asOf; shares to the 921.2M diluted in the release; net cash to -$1,030.1M on the same definition the previous revision used, cash and cash equivalents less total debt, verified by reproducing the old -$1,117.7M from $3,843.6M less $4,961.3M at 2 May 2026; price to the $241.45 close of 27 August 2026. Data center's sequential rate goes 15.4% to 22.6%, solved so the first projected quarter lands on the guided $3.150B mid-point (+0.02% residual) with the line itself inside its own guided 'more than 20% sequentially and roughly 75% year-over-year'. Its decay goes 0.11 to 0.24, which is what stops the raised annual guidance being overshot by $2.6B in fiscal 2028 - and which, on its own, is worth $135 of fair value, more than the whole fall from $146.22 to $132.79. Communications goes +2.5% to -14.0%, the middle of management's guided low-to-mid-teens decline, with decay 0.12 to 0.35. Starting margin 35.0% to 36.6% and starting capex intensity 6.4% to 4.6% on both lines, both recalibrated to the reported basis quarter the way the previous revision calibrated them to its own. What was deliberately NOT changed, and the tensions that leaves. Corporate overhead stays at 8.6% of revenue while stock compensation printed at 11.9% - a roughly $90M-a-quarter under-charge that is now the clearest thing wrong with this page, left alone because overhead is not a roll-forward's to move. Data center's terminal margin stays at 37.0% although management guided non-GAAP operating margin into a 38-40% range from fiscal 2027 Q4 and to the upper end of it through fiscal 2028; the print argues the terminal is too low and the assumption is untouched. Terminal growth rates, the 6.2x exit multiple, the 10% discount rate, all scenario deltas and the 11% tax rate are unchanged. Capex terminal intensity of 5.0% on data center is unchanged and now sits ABOVE the 4.6% start, so that line's capex glides up - a visible artefact rather than a view. The unsettled question a future revision has to answer is communications and other. Management guided a low-to-mid-teens decline in fiscal 2027 Q3 followed by a solid sequential recovery in Q4 and a full-year that approaches its 10% growth target; a single decaying rate cannot carry a dip and a recovery, so this model carries the dip and lands about $215M light on the year. No dollar figure was disclosed for the recovery, so no base shift was invented for it. The other open item is the 6 October 2026 Investor Day, where the long-term custom numbers are promised - this model does not anticipate them. |