Marvell Technology's shares surged nearly 12% following an upbeat long-term forecast, driven by investor confidence in its AI-focused custom chips and interconnect technologies.
Industry-wide AI chip spending is accelerating, with projections indicating over $100 billion in AI chip sales next year. Analysts suggest Marvell's focus on scale-up custom co-packaged optics designs could enhance its role in next-generation AI clusters.
Marvell forecasts fiscal 2028 revenue to reach approximately $15 billion, a nearly 40% increase, surpassing consensus estimates. The company also raised its fiscal 2027 outlook to over 30% growth, nearing $11 billion.
"We expect further penetration of custom XPUs at large AI customers like AWS and Microsoft, along with greater optical content in data centers, over the next five years," stated Morningstar analyst William Kerwin.
Capital spending on AI infrastructure by major tech companies is projected to exceed $630 billion this year, boosting demand for Marvell's custom ASICs and high-speed interconnects. These ASICs offer tailored efficiency for AI workloads.
Analysts anticipate a strong performance for Marvell's data-center business, fueled by rising demand for its optical DSP chips and custom AI processors.