Damnang
Semiconductor Engineer in Silicon Valley, AI Chip Investment Research
Marvell's expanded multi-year deal with GlobalFoundries is very bullish, adding silicon germanium capacity at GF's Burlington, Vermont facility to support Marvell's next-gen pluggable, near-packaged and co-packaged optics as AI data centers push toward higher-bandwidth interconnects, per @wallstengine. x.comÂ
Marvell's Custom Silicon ramp is arriving earlier than expected, but the next leg of upside needs Optical and Memory to turn into revenue. The bigger Custom contribution, expected in FY28, is already showing in H2 FY27, and the $3.15B Q3 guide cleared a roughly $3B hurdle. The 800G and 1.6T optics thesis holds, but scale-up NPO and CPO lack customer and revenue timing, and Structera, CXL and Photonic Fabric still need hyperscaler customers. The thesis is not broken; October Investor Day is next. x.comÂ
Marvell looks well positioned for scale-up compute domains, where interconnect is the wall that limits performance. Scale-up domains should be thought of differently from simply networking racks together, and Marvell's own commentary now focuses on exactly that opportunity. x.com x.comÂ
A potential Lumentum acquisition could let Marvell pair custom AI chips with the optical infrastructure connecting them. Following Celestial AI, it could become one of the few companies offering both, moving toward an AI-focused version of Broadcom; financing a deal this large remains a major concern. x.comÂ
Marvell risks paying a peak-scarcity price for Lumentum if optical supply catches up by 2028-30. The proposed ~$99B deal values Lumentum at roughly 20x guided annualized revenue and 58x estimated after-tax operating income, while Lumentum, Coherent and Chinese suppliers are adding laser capacity. The DSP-and-laser combination has strategic logic, but durable scarcity economics and Nvidia's response remain uncertain. x.comÂ
Marvell's end-to-end networking approach is well suited to heterogeneous GPU, CPU and ASIC compute and mixed optical/copper technologies. Its shift from AI loser to winner deserves a lot of credit: its old custom-ASIC focus had lost out to Broadcom and Alchip, but it is now back in ASICs as Google's TPU v10 partner. The stock's excellent run reflects how it is now perceived. x.comÂ
Lumentum's 109% year-on-year growth and sold-out capacity through 2029 make selling its AI optics exposure questionable. Bloomberg reported Marvell is in advanced talks to buy it; the appeal depends on the price, especially when holders of an $80 billion Lumentum would become holders of a $320 billion-plus Marvell growing 37%. 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
Rising 1.6T switching demand favors optical suppliers, though their execution risks vary. Bank of America says the market could grow ~101% annually through 2030. Marvell's leading DSPs and Lumentum's supply-short 200G EML lasers are lowest risk; Applied Optoelectronics' capacity expansion and Fabrinet's customer concentration make them medium risk. Aeluma remains pre-commercial, while Lightwave Logic's polymer modulators are a high-risk moonshot despite its TSM partnership. x.comÂ
Marvell is the best at connectivity engineering, and optical connectivity, the fastest way to move data, is now the biggest AI bottleneck according to its CEO. Jensen Huang says Marvell is on a path to becoming a $1T+ company. Companies that own the technology to move data at the fastest speeds over any distance will be as important as GPU makers, which is why the market prices optical suppliers like the next Nvidia. 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 $70-90 billion FY31 revenue target looks credible: COO Chris Koopmans said key foundry, substrate and packaging suppliers get five-year forecasts and had already seen it before investor day. A $500 price target still looks too aggressive for now; Marvell must show it can grow its networking and photonics segment to deserve a safe price increase. x.com x.comÂ
