Marvell Tech shares rally on forecast for AI-chip growth
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March 6 : Marvell Technology's shares surged nearly 12 per cent before the opening bell on Friday as investors bet on demand for its AI-focused custom chips and interconnect technologies following an upbeat long-term forecast.
AI‑chip spending has accelerated industry-wide. Broadcom, a key supplier of custom accelerators and networking silicon, this week projected more than $100 billion in AI chip sales next year, underscoring demand widening beyond Nvidia and deepening hyperscaler build-outs.
Analysts at Citigroup said Broadcom is focused on scale-out co-packaged optics (CPO), while Marvell is working with hyperscalers on scale-up CPO designs, a stance they said could lift Marvell's role in next‑gen AI clusters.
Marvell said fiscal 2028 revenue will rise nearly 40 per cent to about $15 billion, topping the $12.92 billion LSEG consensus. It also lifted its fiscal 2027 view to 30 per cent‑plus growth, nearing $11 billion.
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"We expect further penetration of custom XPUs at large AI customers like AWS and Microsoft, along with greater optical content in data centers, over the next five years," Morningstar analyst William Kerwin said.
Capital spending on AI infrastructure by Alphabet , Meta, Microsoft and Amazon is expected to exceed $630 billion this year.
That outlay is boosting demand for Marvell's custom ASICs and high‑speed interconnects that shuttle data between AI processors, memory and servers, and it is "still growing massively," said the company's president and COO, Chris Koopmans.
ASICs, or application‑specific integrated circuits, are chips tailored for a single function or custom workload, offering higher efficiency than general‑purpose graphics processing units.
Analysts say Marvell is set for a strong run in its data-center business, on rising demand for its optical DSP chips that power high-speed links inside AI servers and a multiyear ramp-up in custom AI processors tracking ahead of earlier expectations.
Marvell trades at a 12-month forward price-to-earnings ratio of 19.99, below Broadcom's 25.31, LSEG data showed.
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