Marvell Technology (MRVL) Might Be a UFO!

Superhero movies are still making big money…oh wait…Marvell not Marvel…Fine, I’ll do it myself. But first…

What’s the Word on the Street?

The trade war over tariffs is still on investors’ minds, but the market is up today as it seems to be shrugging it off for the moment. The Federal Reserve meeting minutes from last month’s meeting released and showed that officials are split on how tariffs might affect inflation (half of the Fed’s mandate to control).

There is still an expectation that there will be interest rate cuts this year (2? the first starting in September?), but it’s unclear right now. A couple of Fed officials supported the idea of a rate cut as soon as the next meeting later in July, but that seems unlikely. Powell has clearly and repeatedly declared the Fed’s focus on making data-dependent decisions. Currently, data shows that inflation is lower-ish but still higher than the goal of 2%, unemployment is relatively low and stable, and the economy is growing.

The big question for the Fed is how tariffs will affect the economy, and with the deadline for tariffs apparently now August 1st, we won’t know for some time (if they ever actually get implemented). Basically, there’s a lot of uncertainty right now for the Fed to make a rate cut decision, even if the President is very vocal about wanting interest rates being cut.

Marvell Technology (MRVL)

What Is It?

“Marvell Technology, Inc. engages in the design, development, and sale of integrated circuits. Its products include data processing units, security solutions, automotive, coherent DSP, DCI optical modules, ethernet controllers, ethernet PHYs, ethernet switches, linear driver, PAM DSP, transimpedance amplifiers, fibre channel, HDD, SSD controller, storage accelerators, ASIC, and Marvell government solutions. It operates through the following geographical segments: United States, Singapore, Israel, India, China, and Others. The company was founded by Wei Li Dai and Pantas Sutardja in 1995 and is headquartered in Wilmington, DE.”

Why Is It a Possible UFO?

Several reasons! Its current share price relative to its fair value and what other option traders expect are the highlights.

What’s About Recent News?

Not too much recently. MRVL benefits from the AI race, as it facilitates the infrastructure for AI’s continued advancement. And despite one’s feelings for AI, that race doesn’t seem to be stopping anytime soon - which only stands to benefit Marvell.

What’s the Current Price?

The current price of MRVL is sitting at $72.32 as of this writing. But, despite being down on the year, in the past 3 months it has advanced ~43%. Given that strong, short term move, it’s still attractive relative to its fair value.

What’s the Fair Value?

I’d first like to emphasize that fair value is subjective. Many analysts at many banks and institutions rate stocks differently and assign fair value in their own unique way. So, what I like to do is take all the recent fair values since the most recent earnings report and average them. In this case…

Since MRVL’s most recent earnings report on 05/29/2025, it has received 19 ratings and taking the average the fair value might be somewhere around: $93 (Actually $93.95, but I’m rounding down). 15 ratings are a buy, 4 are a hold. The lowest being $60, the highest being $133.

What Do Options Traders Think?

Calls are trading over equidistant puts, which means traders think there is a chance to the upside. You can see because… forget about the green columns and focus on the red. Notice how on the right side for the $69 put it says $2.02, it’s $3.85 for the equidistant call at $74.

The premium (the credit you receive for executing the trade) is currently less for selling puts, as opposed to selling calls. Basically because of that, option traders expect the stock to go up, rather than down.

What’s the Trade?

My preferred trade is a variation of the wheel without the rolling, AKA cash-secured puts. I typically like to target stocks that offer a dividend and are below fair value. 

Why a dividend? If the trade results in assignment and I’m on the hook for X amount of shares, I can at least be satisfied knowing I picked a (hopefully under fair value) company that will pay me a small amount while I run the other side of the trade AKA covered calls.

It’s a fairly low-risk strategy (all options trading is risky!), that has a higher probability of success, but requires a higher amount of collateral. 

MRVL does offer a dividend, but the yield is low at 0.33%. That said, something is better than nothing!

So if you saw the most recent image above, I already STO (sold to open) 2 contracts of the $60 put for the August 22nd expiration. I like to have a DTE (Days to Expiration) that is around ~45 days.

When the trade reaches 50% profit I will buy it back. I don’t like to be greedy and go for more profit, because I would rather not waste my time being in a trade for too long.

Wait…Where Are the Candlesticks? And All the Other Indicators?

I know many traders love their candlesticks and a ton of indicators. I prefer simplicity. Candlesticks aren’t necessary unless you’re the kind of trader that wants to try and pick the perfect moment to execute a trade, and even then it’s not a sure thing. 

As for indicators, there are a ton. Some of them work sometimes. None are perfect. I don’t want to get bogged down with too many. You’ll drive yourself crazy looking at too many of them, so find a handful you like and stick with those.

Disclosure

• I currently have open trades with MRVL (as mentioned in this post).
• No trade is a sure thing. There is always risk involved. 
• This blog post is not meant to take the place of financial advice, but hopefully acts as a guide for learning or informational purposes.