I already have low-risk exposure to the US market through various ETFs, so I don’t usually consider individual companies when looking for stocks to buy.
But this week, Nvidia CEO Jensen Huang tipped Marvell Technologies (NASDAQ: MRVL) to be “the next trillion-dollar company“. The endoresment prompted the stock to surge 20% on Tuesday (2 June 2026).
That’s no small development, and one I couldn’t help taking a closer look at.
Why the endorsement?
I’ve always thought of Marvell as a competitor to Nvidia, which makes the endorsement all the more interesting. But of course, there’s more to the story.
Huang’s comment comes on top of a strategic $2bn partnership that effectively makes Marvell a core part of Nvidia’s AI ‘factory’ stack.
What it provides are custom accelerators and high‑speed networking that moves data around data centres rather than doing the actual model training. Huang says these interconnect and connectivity chips are now critical because AI systems rely on thousands of processors talking to each other at very high speed.
In other words, if GPUs are the brains of AI, Marvell is developing the nervous system that links them.
How are the numbers looking?
Marvell’s recent results certainly don’t disappoint. In its Q4 2026 results, it reported record revenue of about $2.22bn, slightly ahead of expectations. Data centre sales reached $1.65, up more than 20% year on year.
Management has guided for first‑quarter fiscal 2027 revenue of roughly $2.4bn, again centred on strong data‑centre demand. For me, that’s the real story behind the headline hype.
But hype brings with it another beast: high valuation.
The high price of success
Marvell stock is anything but cheap. The shares are trading on a trailing price‑to‑earnings (P/E) ratio in the mid‑90s: a rich multiple even by high‑growth tech standards.
Price‑to‑book (P/B) sits high as well, with some data sets showing up to 10 times book value, reflecting how much growth is already priced in.
Profitability and leverage look more reasonable. Return on equity (ROE) is around 18%, with $2.5bn of net profit against roughly $14bn of equity — ahead of the broader industry.
The balance sheet shows total debt of $5bn and equity above $18bn, implying a debt‑to‑equity ratio of 0.3 — more than manageable for a business with growing cash flow.
So it’s living up to the hype. But it’s not risk free.
Buy the rumour, sell the news
The biggest risk, in my view, is that expectations now look very stretched.
CNBC’s Jim Cramer summed it up neatly when he said of the post‑Huang surge:
I find this concerning. These are substantial fluctuations, and they are driven solely by one individual’s statement.
If sentiment cools, a high‑90s P/E multiple can compress quickly. Competition is intense too, from Nvidia itself, from Broadcom, and from hyperscalers developing their own in‑house chips.
My verdict?
There’s no denying that Marvell is closely involved with one of the most exciting parts of the AI boom — and has real numbers to show for it.
But the share price has sprinted far ahead of the wider market. Investors considering the stock need to be comfortable with volatility and long‑term AI infrastructure risk.
So am I going to throw everything into it? Not a chance.
But I’d say it’s worth considering a small position with the aim to build slowly, rather than piling in after one headline‑driven spike.
Should you invest £5,000 in Marvell Technology right now?
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Mark Hartley does not hold any positions in the companies mentioned.
