TD Cowen Cuts Marvell Target to $85, Completed $1B Celestial AI Acquisition
TD Cowen lowered Marvell’s 12-month target from $100 to $85 but kept a Hold rating, citing strong AI infrastructure demand that should support 2026-27 semiconductor estimates. Marvell completed its Celestial AI acquisition using $1 billion cash, projecting $500 million revenues by late fiscal 2028 and $1 billion by 2029.
1. Price Target Cut and AI Infrastructure Outlook
TD Cowen analyst Joshua Buchalter reduced Marvell’s price target to $85 from $100 while reiterating a Hold rating, highlighting increasing investment in AI infrastructure and robust semiconductor demand forecasts for 2026 and 2027. He noted that lower share valuations could present entry opportunities as compute and networking trends remain constructive.
2. Celestial AI Acquisition Completed
On February 2, Marvell finalized its acquisition of Celestial AI, a specialist in optical interconnect technology designed for high-speed, low-latency connectivity in large-scale AI systems. This deal enhances Marvell’s product portfolio for AI and cloud data center infrastructure.
3. Financial Impact and Revenue Projections
The acquisition was funded with $1 billion in cash and the issuance of approximately 27 million new shares, increasing operating expenses by about $50 million annually and reducing interest income. Marvell expects Celestial AI to contribute revenue starting in the second half of fiscal 2028, reaching a $500 million annualized run rate by late fiscal 2028 and $1 billion by fiscal 2029.