Can Marvell Technology Sustain Its AI Data Center Growth Momentum?

Marvell Technology’s MRVL data center business is gaining strong traction as AI spending from large cloud customers continues to rise. With AI server deployments increasing, demand for faster networking, lower latency and higher bandwidth is expanding across MRVL’s interconnect portfolio.In the first quarter of fiscal 2027, Marvell Technology delivered record revenues of $2.418 billion, and the data center segment accounted for 76% of total revenues. Marvell Technology’s interconnect and switching businesses are showing particularly strong momentum. The company now expects interconnect revenues to grow more than 70% year over year in fiscal 2027.MRVL’s scale-out switch revenues are expected to exceed $600 million in fiscal 2027 and reach more than $1 billion annualized run rate in fiscal 2028. Stronger demand for 1.6T solutions, coherent light and scale-up networking provides a broader opportunity in scale-up optics.Custom silicon is another major growth driver. MRVL said custom revenues remain on track to grow more than 20% year over year in fiscal 2027, led by its flagship XPU program and XPU attach programs in NIC and CXL. For fiscal 2028, the company now expects custom revenues to more than double year over year.Furthermore, MRVL’s expanded partnership with NVIDIA further strengthens its position in next-generation AI infrastructure, linking Marvell Technology’s custom silicon and optical networking capabilities with NVLink Fusion, optics and AI-RAN opportunities.How Competitors Fare Against MRVL StockThe company faces stiff competition in the networking and custom silicon space from Broadcom AVGO and Advanced Micro Devices AMD.Broadcom is a leader in the domain of custom silicon solutions for data centers. Broadcom’s advanced 3.5D XDSiP packaging platform is critical to ensure the performance and efficiency of custom AI XPUs.Advanced Micro Devices is another established player in the custom silicon solutions and AI accelerator market. Advanced Micro Devices offers semi-custom SoCs and Instinct Accelerators to power data centers.MRVL's Price Performance, Valuation and EstimatesShares of Marvell Technology have gained 239.9% year to date compared with the Zacks Electronics - Semiconductors industry’s growth of 43%.MRVL YTD Performance ChartImage Source: Zacks Investment ResearchFrom a valuation standpoint, Marvell Technology trades at a forward price-to-sales ratio of 19.25X, higher than the industry’s average of 9.13X.MRVL Forward 12-Month (P/S) Valuation ChartImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for MRVL’s fiscal 2027 and 2028 earnings implies year-over-year growth of 41% and 51%, respectively. The estimates for fiscal 2027 and 2028 have been revised upward in the past seven days.Image Source: Zacks Investment ResearchMarvell Technology currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks