Is MRVL's Connectivity Portfolio the Next Growth Catalyst?

Marvell Technology MRVL is rapidly scaling up its connectivity portfolio by introducing products like Active Copper Cable Linear Equalizers, Digital Signal Processors (DSPs), Active Electrical Cables (AEC), scalable data center interconnect, ethernet switch and co-packaged optics as AI workloads demand faster connectivity.

To serve the growing AI market, MRVL is developing scale-up switches that connect AI accelerators within and across racks, requiring multi-terabit bandwidth and ultra-low latency. These switches will support both open standard Ethernet and UALink fabrics, leveraging Marvell Technology’s low-latency SerDes and Ethernet switch IP.

MRVL has started volume shipments of its next-generation 200G per lane 1.6T PAM DSPs to multiple customers in the same quarter. In its second-quarter fiscal 2026 earnings, Marvell Technology highlighted that its connectivity and interconnect portfolio are now core growth drivers, accounting for over three-fourths of total data center revenues.

Marvell Technology’s enterprise networking and carrier infrastructure segments are also showing strong recovery. In the second quarter of fiscal 2026, enterprise networking revenues climbed 28% year over year to $194 million, while carrier infrastructure grew 71% to $130 million.

These factors will contribute to MRVL’s top-line growth. Marvell Technology initiated strong revenue guidance for the third quarter. It expects revenues to be $2.06 billion (+/- 5%). The Zacks Consensus Estimate for Marvell Technology’s third-quarter fiscal 2026 revenues is pegged at $2.06 billion, indicating year-over-year growth of 35.9%.

How Competitors Fare Against MRVL

Marvell Technology competes with Broadcom AVGO and Credo Technology CRDO in the connectivity market. Credo has a wide portfolio of AEC, SerDes IP, Retimer ICs, and system design. Credo’s business is mainly driven by its strong AEC business, which posted double-digit sequential growth last quarter.

Credo’s hyperscaler customer base is expanding, while it is also experiencing robust growth in optical DSP and LRO solutions, along with rising PCIe and Ethernet retimer adoption. Broadcom has a stronghold in carrier Ethernet and transport markets and is a major player in telecom optical interconnects and routing silicon space. Broadcom’s advanced 3.5D XDSiPs are crucial for AI XPU connectivity due to higher density.

MRVL's Price Performance, Valuation & Estimates

Shares of MRVL have lost 26.6% year to date against the Electronics - Semiconductors industry’s growth of 37%.

From a valuation standpoint, Marvell Technology trades at a forward price-to-sales ratio of 7.72X, lower than the industry’s average of 9.2X

The Zacks Consensus Estimate for Marvell Technology’s fiscal 2026 and 2027 earnings implies year-over-year growth of 78.3% and 19.2%, respectively. The consensus estimate for fiscal 2026 has been revised upward in the past 60 days, while the estimate for 2027 has been revised downward 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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