Marvell Technology (MRVL) raised its fiscal 2028 revenue guidance to approximately $18 billion on August 27, 2026, up from $16.5 billion guided a quarter earlier, and the stock still dropped 12.3% over the two trading days that followed. It now trades roughly 30% below its 52-week high and has fallen about 28% over three months. The case for the stock is straightforward: a business accelerating past its own prior targets, at roughly 32 times fiscal 2028 consensus earnings. What complicates that case is a gross margin step-down that arrived alongside the bigger revenue number.
The gross margin question
The company guided fiscal third-quarter 2027 non-GAAP gross margin to a midpoint of 58.0%, a step below the 58.9% non-GAAP figure it delivered in fiscal second quarter 2027. The CFO attributed that decline to the ramp in custom silicon, the chips Marvell designs for hyperscalers, and said custom silicon is expected to accelerate through the second half of fiscal 2027.
Revenue over the last twelve months came in at roughly $9.5 billion. Consensus models 54.7% annual revenue growth from that base to fiscal 2028, against 30.6% delivered over the preceding twelve months. Management guides acceleration on the top line too. The stretch lives in earnings: consensus expects earnings to grow faster than revenue between fiscal 2027 and fiscal 2028, which requires margins to expand. The CFO's preliminary view is that fiscal 2028 gross margin stays in the same range Marvell exits fiscal 2027 in, with ultimate mix as the deciding variable. The room for expansion has to come from expenses. The CFO guided fiscal 2028 non-GAAP operating expenses to grow at roughly half the rate of revenue, and said that restraint is what lifts non-GAAP operating margin toward the upper end of the 38% to 40% long-term target range through fiscal 2028.
The counterargument
The counterargument is that the revenue raise is real and broad. Management said optical DSPs, scale-up optics, switching and custom silicon are all running ahead of plan, and that revenue from the expanded hyperscaler agreement disclosed in August already sits inside the custom target through fiscal 2028, with the larger volume expected in fiscal 2029 and beyond. The stock has more than tripled over the past year. Its worst peak-to-trough decline over the past three years was approximately 61%, which puts the current pullback in context without establishing a floor. Report days have cut both ways: the stock gained 22.4% over the two trading days after the March 5, 2026 report.
The line to watch is October 6, 2026. Marvell has scheduled an investor day where, according to the CFO, the long-term target model gets reset. On balance, the growth story has not broken. The margin question gets its answer then.