Michael Sikand
Investor, Autopilot Portfolio, Founder of Sikand Media
Ciena's 20% drop after a beat-and-raise quarter is a fire sale on one of the best ways to own networking between data centers. Revenue grew 40%, led by $1.1 billion from optical networking, while routing and switching nearly doubled to $174.2 million. Its WaveLogic 6 Extreme is the only shipping 1.6 Tb/s coherent system. Microsoft Azure's Evan Burness said AI computers no longer fit on one site, so it builds continental-scale supercomputers; Ciena is that thesis. Gavin Baker added 87%. 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 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
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
AI data-center spending flows beyond GPUs and operators into networking, optics, power and cooling. Nvidia, AMD, Broadcom and Marvell supply chips; Arista, Nokia and Credo connectivity; Applied Optoelectronics and Lumentum optics; Vistra, Constellation and Bloom power; Vertiv and Modine cooling. Meta's $140B spending this year illustrates the scale, per a commenter with whom the point is agreed. x.com x.comÂ
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'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
Marvell's connectivity and custom AI silicon support raised revenue targets of about $12bn for FY27 and $18bn for FY28, even as shares fell 7.8% after hours on high expectations. F2Q revenue of $2.74bn rose 37% year over year and F3Q guidance of $3.15bn implies 50% growth. Management guides custom ASIC growth above 100% in FY28, with a path to $16bn+ by FY29 versus its ~$10bn, helped by a multi-year Google deal. AI clusters needing ~10x more bandwidth favor 1.6T optics. Buy, $290 target. x.com … Show more
Marvell is the first beneficiary of coherent-lite optics adoption, as @tengyanAI argues, a view worth agreeing with. It would be a buy now if the macro situation were not so volatile. x.com x.comÂ
Ciena solves inter-data-center bandwidth constraints, one of AI's bottlenecks alongside compute and power, and it trades at a more compelling price after the July selloff. Its $7.7B backlog, with about 80% converting to revenue within a year, is chunky. x.comÂ
Distributed compute in smaller modular data center builds sounds bullish for Ciena. Another investor's call with a data center operator flagged that trend as one shaping where optical networking is heading. x.comÂ