MRVL's AI and Optics Ambitions are Growing: What Lies Ahead?

Marvell Technology MRVL is experiencing massive demand growth for its custom AI silicon chips and electro-optics solutions among AI data centers, hyperscalers and in networking applications. The growth is evident in the second quarter of fiscal 2026 financial results, where its data center revenues grew 69% year over year and its carrier and enterprise businesses experienced a recovery.

MRVL has achieved a number of milestones in the second quarter of fiscal 2026. In the second quarter, its next-generation 200G per lane 1.6T PAM4 DSPs saw volume shipments for the first time. The company also announced 2nm custom SRAM that will see its application in next-generation AI infrastructure.

In the second quarter of 2026, the company deepened its collaboration with Microsoft Azure in the HSM space and launched packaged-integrated voltage regulator power solutions for advanced infrastructure. Behind its strong data center growth, Marvell Technology’s ramping up of 51.2 Tbps switches played a formidable role.

For future growth, Marvell Technology plans to ramp customer growth by securing more hyperscalers seeking differentiation, cost reduction, and greater control over their AI infrastructure. As Marvell Technology’s current plan of action significantly correlates with the industry demand, the company is poised for significant long-term growth.

The Zacks Consensus Estimate for Marvell Technology’s fiscal 2026 and 2027 revenues is expected to grow 41% and 16.4%, respectively.

How Competitors Fare Against MRVL

Broadcom AVGO is a leader in the domain of custom silicon solutions for data centres. Broadcom’s advanced 3.5D XDSiP packaging platform is critical to ensure the performance and efficiency of custom AI XPUs. Broadcom’s Semiconductor segment, which accounts for its custom silicon solutions, has experienced massive growth in the past several quarters.

Advanced Micro Devices AMD is another established player in the custom silicon solutions and AI accelerator market. AMD offers semi-custom SoCs and Instinct Accelerators to power data centers. Moreover, Advanced Micro Devices’ reconfigurable Alveo Adaptable Accelerator Cards are critical for compute-intensive applications in data centers.

Seeing the growth of AI-data centers and allied networking required to run the AI workload, companies in this space, including Marvell Technology, Advanced Micro Devices and Broadcom, have sufficient growth opportunities.

MRVL's Price Performance, Valuation and Estimates

Shares of Marvell have lost 43.1% year to date against the Zacks Electronics - Semiconductors industry’s growth of 17%.

From a valuation standpoint, Marvell Technology trades at a forward price-to-sales ratio of 6.08X, lower than the industry’s average of 8.68X.

The Zacks Consensus Estimate for Marvell Technology’s fiscal 2026 and 2027 earnings implies year-over-year growth of 77% and 28%, respectively. The estimate for fiscal 2026 has remained unchanged for the past 60 days, while the estimate for 2027 has been revised upward in the past 30 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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