Marvell Technology (MRVL) lifted its revenue outlook for fiscal 2027 and fiscal 2028 in its late-August report. The stock, at about $206, is up more than 220% over the past twelve months and down about 32% over the past three months. The bear case is the gross margin, and management supplied the number. The counter sits one line further down, in an operating margin that has widened two years running.
Marvell Expects Its Gross Margin To Step Down, Then Hold, Through Fiscal 2028
For fiscal Q3 2027, the company guided non-GAAP gross margin as low as 57.5%. The CFO named the custom silicon ramp as the reason it steps down, and put the preliminary view for fiscal 2028 in the same range. So the part of Marvell accelerating hardest is also the part pushing the gross margin down.
Timing is the bear case's other half. The expanded agreement and warrant Marvell disclosed with a large hyperscaler in August add nothing to fiscal 2028, because management says revenue from the programs it covers through that year already sits inside the custom target, though management says that same agreement gives it greater confidence in the custom business from fiscal 2029 onward. If the fastest-growing products carry a thinner gross margin, each extra dollar of revenue arrives with less profit attached, and growth alone does not fix that.
The Company Keeps More Of Every Dollar Than It Did Two Years Ago

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