TipRanks

Wed, Jun 18, 2025, 6:42 PM7 min read

While the Trump administration’s aggressive trade policies have caused global uncertainty, the semiconductor sector—particularly companies like Marvell Technology (MRVL)—has felt the impact acutely. The pressure on MRVL stock stems not only from tariffs targeting major economies, such as China, but also from the industry’s dependence on rare earth minerals, which are crucial to chip production. The stock has taken a brutal hit since January, shedding more than 50% of its value from lofty highs around $125. However, there are several reasons why MRVL could be in line for a turnaround, and I’m bullish.

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Marvell, which specializes in designing and producing semiconductors for data infrastructure, cloud computing, carrier networks, and storage, plays a vital yet often under-the-radar role in the tech ecosystem. Unlike some of its more prominent peers, Marvell operates largely behind the scenes. However, as more enterprise and consumer applications migrate to the cloud and artificial intelligence becomes increasingly embedded across industries, demand for high-performance networking and storage solutions is poised to grow, positioning Marvell to benefit significantly from these secular trends.

Under prior paradigms, Marvell didn’t have to worry as much about access to critical minerals. With the Trump administration taking a particularly tough stance on China, though, circumstances are much different. China, along with being the world’s second-largest economy, also dominates the production of rare earths. These minerals are critical to several sectors, including tech and defense.

Fortunately, cooler and rational heads may prevail. Although brief on details, diplomats from the U.S. and China have reportedly reached a trade agreement. This new framework includes assurances on rare-earth supply and potential tariff easing, two elements that directly affect Marvell’s business.

Investors may cheer MRVL stock, and I’m certainly bullish on the underlying enterprise. However, for those who are willing to take the risk, an options strategy may be especially attractive.

From an investment perspective, MRVL stock is appealing because of the implied shift in tone from the White House. Previously, President Donald Trump frequently lashed out at Beijing over perceived unfair practices. However, the trade agreement suggests that, once again, Trump is backing down from his bravado.