Marvell Technology (MRVL) has been a major winner of the artificial intelligence (AI) boom so far. In April alone, the data infrastructure semiconductor company’s stock has surged more than 50%, delivering substantial gains. The recent gains on the stock have come on the back of Nvidia Corporation’s (NVDA) $2 billion investment, Oppenheimer’s price target upgrade to $170, and the completion of its $1 billion cash payment for the Celestial AI acquisition to bolster AI interconnect R&D.
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New trading tool for NVDA bearsI am bullish on Marvell as I believe its growing custom silicon business, the partnership with Nvidia, and the growth of AI data center networking revenue will boost the company’s long-term earnings.
Custom Silicon Demand Uplifts Marvell’s Growth Potential
One of the main reasons behind my bullish stance on Marvell is that the company seems well-positioned to benefit from the growing demand for custom silicon. In the past, hyperscalers relied on general-purpose graphics processing units (GPUs). Today, for scaling AI infrastructure, these hyperscalers are increasingly relying on custom silicon. This has a lot to do with AI technology now entering the inference phase after years of training.
According to several industry studies, custom silicon offers total cost of ownership advantages of over 40% compared to standard GPUs. This explains the growing demand for custom silicon. These cost advantages have created a favorable playground for custom silicon developers. According to Marvell, unit shipments of custom accelerators will surpass those of GPUs by 2028. Marvell is capitalizing on this trend by securing contracts with hyperscalers across the board.
Based on company filings, Marvell has already secured custom accelerator and XPU-attach socket design wins with all the major cloud providers worldwide. In Fiscal 2026, which ended in January 2026, the company reported custom silicon revenue of $1.5 billion, and management guided this segment to account for at least 25% of total data center revenue in the future.
The company has adopted a dual approach, supporting both industry consortia, such as UALink, and proprietary systems, such as NVLink Fusion by Nvidia. This has expanded Marvell’s potential customer base for custom silicon.
AI Data Center Networking Growth Will Boost Marvell’s Revenue
In addition to the growing demand for custom silicon, Marvell stands to gain significantly from the expanding growth of AI data center networking requirements. This is another reason behind my bullish stance on the company. Given that hyperscalers are building AI supercomputers today, moving massive amounts of data between interconnected GPUs has become a critical requirement. This is where Marvell’s networking portfolio comes into play.
Marvell sells data center switches that are required to connect GPUs. In Fiscal 2026, revenue from this segment exceeded $300 million, and the management guided for this revenue to surpass $600 million in Fiscal 2027 amid the strong demand. Marvell’s $540 million acquisition of XConn Technologies, which was completed earlier this year, is a driving force behind this growth. Through the Structera S 60260 switches, Marvell is now offering twice the lane density of its competitors.
Marvell is also an established player in the retimers market. Data center operators use retimers to prevent signal losses when data travels within AI server racks. Marvell is the designer of popular Alaska PCIe retimers, which often rank among the most widely used retimers by hyperscalers. Management guided for retimers and active electrical cables (AECs) revenue to double in Fiscal 2027 as well, highlighting the strong momentum in this segment.
The Nvidia Partnership Unlocks New Opportunities
In addition to the structural tailwinds enjoyed by Marvell, the company stands to benefit from its recent partnership with Nvidia. On March 31, Nvidia invested $2 billion in Marvell through a private placement. The two companies later entered a strategic partnership to scale Nvidia NVLink Fusion and enable the development of semi-custom AI infrastructure.
This partnership positions Marvell as a key design partner for custom AI accelerators compatible with Nvidia’s NVLink Fusion ecosystem. The funding secured through this investment will help Marvell’s R&D efforts as it expands to design 3nm and 5nm nodes.
Is Marvell Technology a Buy, According to Wall Street Analysts?
Based on the ratings of 27 Wall Street analysts, the average Marvell Technology price target is $126.12, which implies a downside of roughly 9.7% from the current market price.
Marvell’s stellar stock market performance so far this year has a lot to do with the downside implied by analyst ratings today. The good thing is that many analysts are bullish on Marvell, evidenced by 23 buy ratings against no sell ratings. On April 15, Oppenheimer analysts raised Marvell’s price target to $170 from $150, citing the bullish outlook for the company’s AI data center networking business and custom silicon growth.
I believe the company will benefit from a wave of positive analyst revisions to earnings estimates in the coming quarters as the company emerges as one of the biggest winners of the AI boom.
Takeaway
Marvell Technology is well-positioned to benefit from the AI boom. The company’s custom silicon business benefits from a few macro tailwinds, while its AI data center networking business is experiencing strong demand as hyperscalers grapple to ensure seamless connectivity among thousands of GPUs within data centers. Marvell’s strategic partnership with Nvidia also boosts its growth potential. I am bullish on Marvell as I believe its AI growth story is still in the early stages.