Marvell Technology's Optics Business Expands: What's on the Horizon?

Marvell Technology’s MRVL optics business is experiencing robust growth as the industry is transitioning to 1.6 Terabit optical interconnects. The company, in its first-quarter fiscal 2026 earnings, reported that its electro-optics products used in AI and cloud computing are one of the proponents that are experiencing this traction.

Its latest introduction, the co-packaged optics solutions, which feature higher interconnect densities, longer reach and scalable networking architecture, are an upgrade over the slower the previous generation. These products have optical fibres instead of copper connections, which are optimum for networking needs in AI systems.

Marvell Technology’s Silicon Photonics Light Engines support speeds up to 6.4T by combining several parts into compact modules, making them ideal for both plug-in and co-packaged uses. These features can help enterprises to scale their large AI workloads. MRVL expects its optics solutions to drive its business in the second quarter of fiscal 2026.

Traction in its optics business is a contributing factor in Marvell Technology’s top-line growth. Its first-quarter fiscal 2026 revenues grew 63% year over year. The Zacks Consensus Estimate for Marvell Technology’s fiscal year 2026 revenues is pegged at $8.22 billion, indicating year-over-year growth of 42.6%.

How Competitors Fare Against MRVL

As optics are gaining traction among next-generation AI infrastructure, Cloud Data Centers and Scale-Up and Scale-Out Networking, companies like Broadcom AVGO and Coherent Corp. COHR have become Marvell Technology’s formidable competitors in this space.

Broadcom is a dominant player in the pluggable optics space with offerings, including PAM4 DSPs and optical transceivers. Broadcom directly competes with Marvell Technology across high-speed PAM4, Ethernet PHYs, and optics used in hyperscale AI networks.

Coherent also offers optical components, transceivers, coherent optics and optical engines used in data centers, overlapping with Marvell Technology's light engine offerings. Recent growth in AI and ML workloads has ramped up its sales of 800G transceivers and active optical cables.

MRVL’s Price Performance, Valuation and Estimates

Shares of Marvell Technology have lost 34.8% year to date against the Electronics - Semiconductors industry’s growth of 14.9%.

Marvell Technology YTD Performance Chart

From a valuation standpoint, Marvell Technology trades at a forward price-to-sales ratio of 6.95X, lower than the industry’s average of 8.66X.

Marvell Technology Forward 12 Month (P/S) Chart

The Zacks Consensus Estimate for Marvell Technology’s fiscal 2026 and 2027 earnings implies year-over-year growth of 77.7% and 27.73%, respectively. The estimates for fiscal 2026 and 2027 have been revised upward in the past 60 days.

Marvell Technology currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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