Halyk Finance Trading Idea: Marvell Technology

Marvell Technology develops semiconductor solutions for data center infrastructure, enabling data transmission, processing, storage, and protection in artificial intelligence and cloud computing systems. The fabless business model is based on a portfolio of high-speed connectivity and custom silicon solutions: custom AI accelerators XPU, PAM4-based optical DSPs, electro-optical modules, switches, PCIe retimers, storage controllers, as well as CXL technologies and network interface cards.

• Scaling the custom ASIC/XPU business — custom accelerators remain Marvell’s largest growth driver. Management expects revenue from this segment to expand from approximately $1.5 billion in FY2026 to over $4 billion by FY2028, nearly tripling in two to three years. Key drivers are concrete: increasing volumes of Amazon AWS Trainium 2 and 3, Google’s ARM-based Axion processor, Meta’s DPU programs, and entry into high-volume production for another, yet unnamed hyperscaler with already committed demand for FY2028. As the share of custom XPUs in the overall AI accelerator market grows from 32% to 53% by 2027, Marvell is capturing an increasingly large and rapidly growing portion of the market where value is created through custom design and deep customer relationships.
• Partnership with Nvidia and integration into NVLink Fusion — in March 2026, Nvidia invested $2 billion in Marvell and announced a strategic partnership integrating Marvell’s custom silicon and optical solutions into the AI factory ecosystem via the NVLink Fusion platform, including collaboration on silicon photonics. The practical benefit is that hyperscalers designing chips with Marvell no longer have to choose between custom silicon and Nvidia’s stack — they get both. This strengthens Marvell’s future technology moat and enhances its potential valuation multiple as the business scales.
• Optical interconnect and transition to 1.6T — optics and high-speed connectivity form the second pillar of Marvell’s growth and leadership. As the industry transitions from 800G to 1.6T, the optical business is growing at approximately 70% year-over-year, and the mass deployment of 1.6T PAM4 DSPs will further accelerate interconnect revenue in FY2027. With the rise of agentic AI, where a single query generates thousands of interactions from autonomous agents to models in distributed clusters, connectivity becomes critical — and Marvell’s network interface cards, PCIe retimers, and CXL solutions are poised for multiple-fold order growth.
• New markets — Marvell is opening new addressable markets. According to UBS, revenue from CXL alone could exceed $1 billion by 2027, and the launch of the Teralynx T100 102.4 Tb/s switch — which the company calls the first in the industry for AI infrastructure — expands product coverage. At the same time, the sale of the non-core Automotive Ethernet business to Infineon for $2.5 billion in cash, combined with Nvidia’s direct investment, frees up capital for AI chip development aimed at achieving high ROIC in 2028–2030.