Marvell Tech Set for Major Growth with AI Accelerators for Amazon, Google, and Potential Microsoft Deal: Analysts

Zinger Key Points
  • Needham reiterates Buy on Marvell with $95 target; highlights AI, cloud optics, and silicon photonics growth.
  • Marvell aims for $2.5B in AI revenue by FY26, with a new AI accelerator for a third hyperscaler, possibly Microsoft.

Needham analyst Quinn Bolton reiterated a Buy rating on Marvell Technology Inc MRVL with a price target of $95.

On Thursday, Marvell hosted its Accelerated Infrastructure for the AI Era Event, at which it laid out its Data Center expectations and growth drivers. Growth opportunities include custom computing, cloud optics, AEC DSPs, silicon photonics (SiPho), and Ethernet switching. 

Marvell’s key announcements included the company’s third North American hyperscaler customer for custom silicon, likely to generate more revenue than its first two hyperscaler customers combined, expectations for AI revenue to exceed $1.5 billion and $2.5 billion in fiscal 2025 and fiscal 2026, respectively, and an updated Data Center TAM that will exceed $75 billion in 2028 with Marvell’s goal to secure 20% share of this TAM long-term.

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

Should the company achieve its target for AI revenue to exceed $2.5 billion in fiscal 2026, Bolton noted that an upside to his fiscal 2026 estimates is possible.

Marvell made two new announcements regarding its large hyperscaler customers. As per the analyst, in addition to already ramping up an AI training accelerator for a customer, possibly Amazon.Com Inc AMZN

Marvell also plans to ramp up an AI inference accelerator sometime in 2025. While not new, Marvell is ramping an Arm CPU for a customer, likely Alphabet Inc GOOG Google, as per Bolton.

Marvell disclosed that the company is developing an AI accelerator for a third customer, possibly Microsoft Corp MSFT, Bolton writes. 

This opportunity will likely be larger than the combined engagements with Amazon and Google. The Microsoft AI accelerator will go into production in calendar 2026. 

Bolton projected first-quarter revenue and EPS of $1.15 billion and $0.23.

Rosenblatt analyst Hans Mosesmann maintained a Buy rating on Marvell with a price target of $100.

Mosesmann flagged Marvell’s expectations of Data Center TAM, AI acceleration sales, and the addition of a third larger hyperscaler.

In interconnect, the company ran through new markets that support a new TAM of over $4 billion, as per the analyst.

In switching, Marvell’s roadmap is competitive, and from a low base, he noted gaining share vs. Broadcom Inc’s AVGO crown jewels, Tomahawk and Jericho road maps off a low base.

Mosesmann projected first-quarter revenue and EPS of $1.15 billion and $0.23.

Marvell stock gained 80% in the last 12 months. Investors can gain exposure to the stock via IShares U.S. Digital Infrastructure And Real Estate ETF IDGT and Spear Alpha ETF SPRX.

Price Action: MRVL shares are trading lower by 0.53% to $71.21 on the last check Friday. 

Photo via Shutterstock

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