Marvell Plays AI Hardball: Divestiture Sparks 155% Upside, Says Analyst

Marvell Technology Inc MRVL is making a clean break from its automotive ambitions, and JPMorgan's Harlan Sur thinks that's exactly the kind of focus investors should be betting on.

Following the company's $2.5 billion sale of its Automotive Ethernet business to Infineon Technologies AG, Sur reiterated an Overweight rating and placed a $130 price target by December 2025, implying a 155% upside from Friday's close at $51.

AI Gets The Green Light

While growing fast, the automotive Ethernet business isn't expected to account for more than 2-3% of Marvell's revenue mix in 2026.

Meanwhile, the company's AI and data center portfolio is growing at a 30-40% annual clip, notes Sur. In short, this isn't about dumping a promising segment – it's about clearing the runway for a higher-growth flight path.

Read Also: JPMorgan Says Broadcom, Marvell Could Dominate AI’s Next Frontier — Here’s Why

High Valuation, Low Drag

The deal was struck at a 10.5x sales multiple, a healthy premium for a business expected to bring in $225 to $250 million in FY26 with 60% gross margins.

Sur says the transaction could be slightly accretive to earnings – boosting Marvell's EPS by 5 to 10 cents per share—especially if the cash is channeled into stock buybacks.

Clean Break, Clear Strategy

Marvell's exit from the auto space follows its October quarter restructuring, where it began shifting investments away from enterprise networking, carrier infrastructure and automotive.

The company is now focused on AI and accelerated computing – a theme Sur sees as key to unlocking long-term value.

Marvell may have built the auto business from scratch over eight years, but with a $2.5 billion payday and a 155% potential upside, the real race is in AI, and Marvell just hit the gas.

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