MRVL's Custom Silicon Business Scales Up: What's Coming Next?

Marvell Technology's MRVL AI XPU offerings are experiencing massive traction among hyperscalers, AI data centers and high-performance computing workloads. In the third quarter of fiscal 2026, Marvell Technology’s data center segment posted revenues of $1.52 billion, growing 37.8% year over year, led by strong traction in custom XPU silicon products.

Marvell Technology expects its custom silicon business to roughly contribute to one-fourth of its overall data center revenues and grow at least 20% next year. The company recently unveiled 18 XPU and XPU-attach socket design wins, among which many are already in volume production.

These design wins include full custom XPU programs, XPU-attached silicon, electrical I/O chiplets integrated inside multi-die XPU packages and other products, contributing to a pipeline of more than 10% of a $75 billion lifetime revenue funnel. MRVL’s custom silicon strategy has evolved from a niche application-specific integrated circuit (ASIC) offering into a deeply embedded, multi-year hyperscaler partnership model.

Now, Marvell Technology develops custom ASIC 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.

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 necessary support to sustain in this space.

MRVL's Price Performance, Valuation and Estimates

Shares of Marvell Technology have gained 13.1% in the past six months compared with the Electronics - Semiconductors industry’s growth of 22.3%.

MRVL 6-Month Performance Chart

From a valuation standpoint, Marvell Technology is trading at a forward price-to-sales ratio of 7.31X, lower than the industry’s average of 8.46X.

MRVL Forward 12-Month (P/S) Valuation Chart

The Zacks Consensus Estimate for MRVL’s fiscal 2026 and 2027 earnings implies year-over-year growth of 81% and 26%, respectively. The estimates for fiscal 2026 and fiscal 2027 have been revised upward in the past 30 days.

Marvell Technology currently carries a Zacks Rank #2 (Buy). 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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