This article first appeared on GuruFocus.

Goldman Sachs is staying cautious on Marvell Technology (NASDAQ:MRVL) despite another earnings beat, arguing that the AI chipmaker's explosive rally has already priced in much of the good news. Analyst James Schneider reiterated a Neutral rating and $195 price target, saying Marvell shares could remain range bound as investors wait for clearer evidence that custom compute growth can justify the stock's elevated expectations.

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Marvell supplies semiconductors used in data centers, including custom AI accelerators, networking chips and optical connectivity products. Its growing exposure to hyperscaler AI spending has made the company one of the market's major picks-and-shovels plays on expanding data-center infrastructure.

The caution comes despite solid fiscal second-quarter results. Marvell reported $2.74 billion in revenue, up 37% year over year, topping Wall Street's $2.71 billion estimate. Adjusted earnings of $0.94 per share also edged past the $0.93 consensus.

Management's fiscal third-quarter outlook was stronger as well, with revenue projected at $3.15 billion, ahead of analysts' roughly $3.04 billion forecast.

But Schneider argues the hurdle has become much higher after Marvell stock surged roughly 185% in 2026. Rather than another modest earnings beat, Goldman now wants evidence that Marvell's custom compute business can meaningfully accelerate during the second half of fiscal 2027.

That puts increased attention on Marvell's biggest hyperscaler relationships. Goldman is looking for more detail on the company's expanded Google partnership and the ramp of ASIC revenue tied to Microsoft (NASDAQ:MSFT), along with updates to Marvell's 2027 and 2028 Data Center revenue targets.

Goldman's $195 target highlights the valuation risk created by Marvell's enormous rally. Investors should focus less on small quarterly beats and more on whether custom compute revenue ramps quickly enough to sustain Marvell's longer-term Data Center forecasts. Stronger visibility around Google and Microsoft programs could support another valuation reset higher, while delays, weaker margins or slower ASIC deployments would strengthen Goldman's range-bound thesis. Marvell's upcoming analyst-day updates could therefore become a more important catalyst than the latest earnings beat itself.