Marvell Technology rises as Raymond James upgrades on cloud strength
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Marvell Technology (NASDAQ:MRVL) shares rose in premarket trading even as Raymond James upgraded the semiconductor company, telling investors not to "fight the cloud."
Analyst Chris Caso upgraded Marvell Technology (MRVL) to outperform from market perform and put an $80 price target on the stock, noting that its earnings multiple has declined to a "more reasonable" 22 times 2024 earnings, compared to mid-30s last year and the company's path to more than $3 per share in earnings is independent of macro growth.
"We think 75% of the incremental growth required to achieve consensus revenue is from high probability segments, well-buffered from market conditions," Caso wrote in a note to clients, adding that the 75% comes from five areas, such as semi-custom cloud ASICs, Inphi datacenter, automotive Ethernet, 5G for Nokia and Samsung and new Innovium switch revenue. 
Marvell Technology (MRVL) shares rose slightly less than 0.5% to $58.65 in premarket trading.
In addition, Caso noted that Marvell (MRVL) isn't likely to see a near-term change in its earnings estimates, though it's possible if the market remains favorable.
Nonetheless, the upgrade is about longer-term growth, going into 2024 and 2025, as growth trends are preserved and the stock can "maintain its multiple and continue to rise on higher [2025] numbers."
Earlier this month, Goldman Sachs named Marvell Technology (MRVL) as one of the tech stocks with low and variable gross margins going into earnings season.