MRVL's Custom Silicon Pipeline Expands Rapidly: What's Ahead?

Marvell Technology's MRVL AI XPU offerings are experiencing massive traction among hyperscalers, AI data centers and high performance computing workloads. The company now has 18 XPU/XPU-attach sockets with more than 50 new pipeline opportunities with an estimated $75 billion of lifetime revenue potential, as discussed in second-quarter earnings.

Marvell Technology had already been heavily investing in its custom silicon programs to rapidly scale production. Earlier, it had introduced a 2.5D advanced packaging platform built in-house that would enable it to cater to custom XPUs that ensure reduced power consumption while lowering overall product cost for customers.

Adding to its expertise in custom AI silicon chips, Marvell Technology also introduced a first-of-its-kind 64 Gbps/wire Bi-Directional die-to-die interface IP in 2nm to power next-generation XPUs. The new IP offers over 3x UCIe bandwidth density while reducing die area use to 15%.

Marvell Technology also develops custom application-specific integrated circuit designs for AI, cloud data center and OEM customers using its advanced 5nm and 3nm processes, like 112G XSR serializer/de-serializer (SerDes), Long Reach SerDes, PCIe Gen 6 SerDes. These capabilities enable MRVL to stay ahead of its competitors in the custom AI silicon space.

Marvell Technology’s data center segment has taken the lead among all its segments with 69% year-over-year revenue growth in the second quarter of fiscal 2026, driven by robust demand in custom AI accelerators, including AI XPUs and custom high bandwidth memory chips and is likely to grow in double digits in the upcoming quarter as well.

How Competitors Fare Against MRVL

Broadcom AVGO is one of the leading suppliers of custom silicon solutions for data center, service provider, and enterprise networking customers. Broadcom’s advanced 3.5D XDSiP packaging platform is specifically designed to enhance the performance and efficiency of custom AI XPUs.

Advanced Micro Devices AMD is another player in the custom silicon solutions and AI accelerator space with its semi-custom SoC offerings and Instinct Accelerators that power numerous data centers. Advanced Micro Devices’ reconfigurable Alveo Adaptable Accelerator Cards are used to speed up compute-intensive applications in data centers.

While Broadcom and Advanced Micro Devices are formidable players in the custom silicon space for AI acceleration, Marvell Technology’s deep partnership with NVIDIA provides MRVL the necessary support to sustain in this space.

MRVL's Price Performance, Valuation and Estimates

Shares of Marvell Technology have lost 42.2% year to date against the Electronics - Semiconductors industry’s growth of 19.1%.

From a valuation standpoint, Marvell Technology trades at a forward price-to-sales ratio of 8.48X, lower than the industry’s average of 7.78X.

The Zacks Consensus Estimate for MRVL’s fiscal 2026 and 2027 earnings implies year-over-year growth of 78.3% and 19.3%, respectively. The estimate for fiscal 2026 has remained unchanged in the past 60 days, while the estimate for fiscal 2027 has 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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