Rumor refuted! Morgan Stanley confirms Marvell Tech still holds a large order for Microsoft AI chips, maintains a target price of $90
Morgan Stanley released a research report, maintaining a "Hold" rating on Marvell Tech, with a target price of $90. Analyst Joseph Moore confirmed that Marvell Tech still retains its AI chip design project with Microsoft, despite market concerns about its prospects. Moore pointed out that the high switching costs of replacing suppliers mean that the design rights for the project still belong to Marvell Tech. Although the first revenue is expected to be generated in the second half of 2026, Morgan Stanley is cautious about its short-term revenue growth
According to the Zhitong Finance APP, on Wednesday, Morgan Stanley released a research report maintaining a "hold" rating on Marvell Technology (MRVL.US) with a target price of $90.
Analyst Joseph Moore discussed market concerns regarding Marvell Technology's business prospects, particularly regarding its second custom AI chip customer, which is widely believed to be Microsoft's (MSFT.US) Maia 2 project. Contrary to a recent downgrade view from another institution suggesting that Marvell Technology's project might be replaced by Broadcom (AVGO.US), Moore confirmed that industry checks indicate Marvell Technology still retains the design project.
Moore emphasized that Marvell Technology's first custom chip customer is Amazon's (AMZN.US) Trainium 2 project, and the second is Google's (GOOGL.US) custom ARM processor project. He pointed out that although Broadcom is indeed interested in competing for this business, industry insiders have emphasized to Morgan Stanley that since the Maia 2 chip is entirely designed by Marvell Technology, switching suppliers would involve a complex multi-year process, and the design rights currently still belong to Marvell Technology.
The analyst specifically noted the high switching costs associated with such alternatives. He explained that unlike the Trainium project, which primarily uses Microsoft's proprietary design IP, Maia 2 is a complete design solution independently developed by Marvell Technology, significantly increasing the difficulty of switching suppliers.
Although Marvell Technology is optimistic about the project's progress and expects to generate its first revenue in the second half of 2026, Morgan Stanley remains cautious. Moore cited historical data indicating that the success rate of first-generation ASIC chips is generally low, so despite smooth project advancement, substantial revenue in the first year is still difficult to anticipate.
Morgan Stanley ultimately concluded that while Marvell's stock still has trading value in the short term, it lacks the momentum for unexpected revenue growth compared to its peers, resulting in slightly lower investment certainty. Based on this, the "hold" rating and $90 target price remain unchanged
