CK Capital
Defense/Space/Tech/Photonics Investor, Co-Owner of CV Research
Marvell's custom silicon business is set to accelerate significantly from the second half, as every hyperscaler builds its own chips and many build them with Marvell. Marvell raised its outlook for both fiscal 2027 and 2028 in one release. Q2 revenue rose 37% to $2.739B, data center rose 46% to 79% of sales, and the Q3 guide of $3.15B is another 15% sequential jump. CEO Matt Murphy said AI bookings remain exceptionally robust and growth should accelerate through fiscal 2027. x.comÂ
Marvell sits at the exact intersection of AI's next two bottlenecks: memory latency now, and interconnect bandwidth next. This week it is showcasing CXL near-memory acceleration and its Photonic Fabric, aimed at both. Nvidia's Jensen Huang called Marvell "the next trillion dollar company," unprompted, at Computex. x.comÂ
The market may still be underestimating Marvell as it becomes a key supplier of custom silicon and connectivity for the AI build-out. At its Investor Day, Marvell put its addressable market at about $400 billion by 2030, targeted about $20B of FY28 revenue and said revenue could reach $70-90B by FY31. Last quarter revenue rose 37% to $2.74B on AI and data-center demand, and Nvidia's Jensen Huang reportedly called Marvell the next trillion-dollar company. x.com x.comÂ
Marvell is compounding optics, switching and custom compute at once, so a single AI cluster now turns into multiple revenue lines for it. Its CEO told investors this week that the data center segment now exceeds $2B per quarter. x.comÂ
Marvell's extremely high expectations make its valuation hard to justify amid customer concentration, custom-silicon competition and acquisition risks. It benefits from AI infrastructure spending, but those risks are making investors question what it is worth. x.comÂ
Marvell builds the chips for the data-center pipes that AI keeps choking, and its numbers now show that thesis. Last quarter's revenue grew 36%. At 40 times forward earnings the stock is no longer cheap, so further gains must come from earnings growth. x.comÂ
A rising value of compute per watt should benefit AI cloud, chip, connectivity and power suppliers. Elon Musk says that value will rise over time. Nebius has Microsoft and Meta deals; Marvell benefits from custom silicon demand; Credo connects GPUs; Vistra has long-term nuclear supply deals with Amazon and Meta; Nokia's Nvidia partnership could help it capture data-center networking growth. x.com x.comÂ
Marvell's strong quarter was already priced in, so a sell-the-news decline is likelier. Q2 revenue rose 37% to $2.739B, data center revenue 46%, and Q3 guidance of $3.15B beat estimates; management sees custom silicon revenue more than doubling in FY28 and a path to about $18B of FY28 revenue. But the Google partnership and AI growth were largely traded ahead, and the stock never broke its rising channel's top. Long term, it is still a good company to add to at better prices before the midterms. … Show more
Marvell sits at AI infrastructure's physical layer, so hyperscaler capex flows through hardware that needs its products. It makes 800G and 1.6T optical interconnects, 51.2T Ethernet switches and custom XPUs, and released the first 102.4 Tbps AI switch. Its CEO cited exceptional AI bookings and significantly raised FY27 and FY28 outlooks; Q2 is guided to $2.7B, up 35%. It joins the S&P 500 on June 22, and Jensen Huang calling it the next trillion-dollar company implies 3x+ from $272B. x.comÂ
Marvell's custom AI silicon business is scaling very fast after Google struck a deal with it for custom chips covering AI, networking and memory, including an equity stake in Marvell. Stifel says the deal could generate up to $120B of revenue over about seven years, far above Marvell's current annual run rate. x.com x.comÂ
Marvell's ambitious long-range outlook is encouraging about hyperscaler and AI-lab spending plans, but hitting it depends on AI revenue and token consumption soaring through decade's end. Even if its FY28 estimates rise again, Marvell trades at a healthy premium to Nvidia and Broadcom, especially on a GAAP basis, and those two are growing fast too. x.comÂ
Marvell's new six-channel chips could ease AI servers' memory constraint by letting them add capacity for bigger models and longer prompts. Samples are expected in Q1 2027. Its custom silicon and connectivity could capture more AI infrastructure spending, though competition and customer bargaining limit retained value. x.comÂ
