Investing.com -- Marvell Technology Inc. (NASDAQ: MRVL) shares rose 7% Tuesday morning after HSBC upgraded the stock to Buy and set a Street-high price target of $300, up from $85, ahead of the company’s earnings report scheduled for Wednesday.

HSBC analyst Frank Lee raised the firm’s price target and earnings estimates, citing undervalued revenue growth from optical interconnect and compute express link opportunities. The new target represents a 53% increase from current levels and exceeds the previous Street-high of $230 set by Susquehanna Financial earlier in the day.

Lee revised his fiscal year 2027 optical interconnect revenue estimate to $5.2 billion, 10% above consensus, and fiscal year 2028 revenue to $8.8 billion, 37% higher than consensus. The analyst expects the market for optical transceivers to grow 70% in 2027 as AI clusters expand from single racks to multi-rack AI factories.

"We believe the revenue growth from optical interconnect is still being underestimated by the market, which will lead to upside to consensus forecasts over the next two years," Lee wrote.

The analyst noted Marvell holds a majority market share in Digital Signal Processors, which have a 1:1 attach rate to optical transceivers. HSBC raised its fiscal year 2027 and 2028 earnings per share estimates by 21% and 61% to $4.07 and $7.12, respectively, and applied a target price-to-earnings ratio of 42 times fiscal year 2028 estimates.

Lee also cited potential upside from compute express link demand driven by memory shortages related to agentic AI CPU requirements. The firm’s fiscal year 2028 and 2029 ASIC revenue estimates are 16% and 24% higher than consensus.

Susquehanna Financial raised its price target on Marvell to $230 from $100 Tuesday, maintaining a positive rating. Analyst Christopher Rolland noted Amazon capex was revised higher to $218 billion from $200 billion following AWS’s first quarter earnings report. Anthropic recently announced a new agreement with Amazon for up to 5 gigawatts of compute.

For Inphi, Rolland said shipments of 800G transceiver modules are expected to double in 2026 after already doubling in 2025.

Stifel analyst Tore Svanberg raised his price target on Marvell to $210 from $140 on Friday while maintaining a Buy rating.