Marvell Technology Poised To Expand Leadership In AI Chip Market, Analyst Sees Market Potential Worth Billions

Zinger Key Points
  • BofA Securities sees Marvell capitalizing on AI chip market with $20-$30B TAM potential.
  • Analyst Vivek Arya forecasts Marvell's custom AI chip market share to exceed 10%, reaching $2-$3B annually by 2026/2027.

BofA Securities analyst Vivek Arya reiterated a Buy rating on Marvell Technology, Inc. MRVL with a price forecast of $95.

The analyst sees Marvell showcasing its broad range of computing, electro-optics, networking, and custom-chip design assets at its “Accelerated Infrastructure For The AI Era Event” on April 11.

According to Arya, Marvell could outline a $20 billion- $30 billion incremental TAM, with the potential for a 10%+ share in custom AI accelerators/server ASICs.

The analyst also sees a small but incremental opportunity in high-speed Ethernet switches and the ability to maintain the current 62%-63% gross margin profile even if custom chip contributions grow.

Arya expects the company to maintain leadership in high-growth optics as the transceiver market doubles over the next few years due to larger AI clusters.

The analyst forecasts the total accelerator market to double year over year in 2024 to about $90 billion and double again towards $180 billion-$200 billion by 2027.

Arya projects NVIDIA Corporation NVDA to maintain 75% share, custom ASIC chips to be a 10%-15% share, and other merchant products to be the remaining 10%-15% share. 

Overall, Arya projects expect Marvell to become more relevant and eventually claim over 10% share in the custom AI chip market, so $2 billion-$3 billion annually by 2026/2027 vs. $0.6 billion/$1 billion in 2024/25.

Price Action: MRVL shares are trading higher by 2% to $72.29 on the last check Friday. 

Photo via Shutterstock

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