Marvell Technology stock price has staged a strong comeback in the past few months, moving from a low of $47 in April to a high of $92.90. This rebound continued this week amid reports that Masayoshi Son considered placing a bid for the company, and after it published strong results.
Softbank considered buying Marvell Technology
Masayoshi Son, the billionaire founder of Softbank, has been studying and talking with Marvell this year. According to Bloomberg, he is aiming to acquire the company and possibly combine it with Arm Holdings, a top semiconductor firm that he controls.
A deal to acquire Marvell Technology would be a big deal because of it size. It has a market capitalization of over $80 billion, down from a peak of $109 billion late last year. As such, it would likely seek a buyout price that is much higher than that.
At the same time, there are concerns on whether the deal would be allowed to go on in the first place. For one, it is unclear whether the Trump administration will be comfortable giving away an American chip giant to a Japanese firm.
Also, there would be anti-trust issues in key countries in the United States, Europe, China and other countries. A good example is when Nvidia attempted to buy Arm, only for regulators to block the deal.
Bloomberg also reported that other companies may consider making a bid for Marvell. Based on it size, companies that may comfortably place a bid are firms like Nvidia, Broadcom, TSMC, Samsung, AMD, Micron, Lam Research, and Qualcomm.
The other major challenge is that Marvell has not won major clients recently. For example, OpenAI has opted for Broadcom for its custom semiconductors.
MRVL’s business is doing relatively well
The most recent results showed that Marvell’s business was doing well as its revenues and profitability jumped, driven by the ongoing demand for semiconductors. These results helped the company continue its recovery after the stock plunged in March after weak guidance.
Marvell Technology said that its revenue rose by 56% in the second quarter to $2 billion. This revenue was higher than expected and a few points above midpoint guidance.
The company, like other top players in the semiconductor industry, is benefiting from the growth in the data center sector. Its data center revenue rose by 68% to $1.49 billion and was about 74% of its consolidated revenue.
The company also noted that its enterprise and carrier businesses were recovering, with combined revenue growth of 43%.
Looking ahead, the next key catalyst for Marvell stock will be its December earnings. Analysts expect the results to show that its revenue rose by 36% in the last quarter to $2.06 billion. These analysts also see its annual revenue rising by 40% to $8.13 billion.
READ MORE: Is it safe to buy the Marvell stock price dip or sell the rip?
Marvell stock price technical analysis
MRVL stock price chart | Source: TradingView
The daily timeframe chart shows that the MRVL stock price has jumped from a low of $46 in April to $92.90 today. It recently moved above the key resistance level at $85, its highest point in June.
The stock has recently formed a golden cross pattern as the 50-day and 200-day moving averages crossed each other. It has moved above the Ichimoku cloud indicator.
Therefore, the stock will likely continue rising as bulls target the key resistance at $110. This target is about 18% above the current level. A drop below the key support at $85 will invalidate the bullish view.
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