The Few Bets That Matter
Concentrated Equity Investor, AI Infrastructure
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.com
Google's choice of Marvell for new custom AI chips shows it expects Marvell to add networking strength, bandwidth and latency optimization, that Broadcom can't provide inside its TPUs. Current hardware isn't enough to scale AI further in volume or performance, so the hardware cycle is rotating from one bottleneck to the next rather than ending. Marvell should be the first designer any company calls to upgrade its networking, making it one of the best buys on any pullback. x.com
The Lumentum merger makes Marvell's path toward a $1 trillion valuation look clearer if it executes well. Jensen Huang had called Marvell the next $1 trillion company. Lumentum's demand is sold for the next two to three years, though whether that gives Marvell an edge remains an open question. Marvell looks like a long-term opportunity, but the route to building a position is still unclear. x.com
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.com
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.com
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.com
Marvell is positioned for AI's next bottleneck, connectivity, as larger AI compute, agentic AI and reasoning models drive surging demand to link GPUs and XPUs at ultra-high speed. Its CEO said Marvell is next after memory and set its 2030 addressable market at $400 billion, about four times the prior figure, the most bullish recent commentary. Marvell is Nvidia's pick as the next trillion-dollar company. x.com
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.com
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.com
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.com
Marvell is a loser from the AI-lab slowdown, because it can't earn premium margins if Nvidia and Broadcom also see a pause. Lab leaders including Elon Musk, Dario Amodei and Sam Altman have pivoted to warning that AI could kill you, which, with AI already polling badly, will make it much harder for AI to attract investment. x.com
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.com
