Marvell Technology (MRVL) has agreed to sell its Automotive Ethernet business to Infineon Technologies AG (IFNNY) for $2.5 billion in an all-cash deal. The step aligns with Marvell’s strategy to focus on artificial intelligence (AI) and specialize in data center infrastructure. Following the news, MRVL stock rose 3.4% in after-hours trading yesterday.
Marvell Fortifies its AI-Centric Vision
The deal involves divesting Marvell’s Brightlane Automotive Ethernet portfolio and related assets and is expected to close in 2025, subject to closing conditions. Infineon specializes in automotive microcontrollers, and through this strategic acquisition, it aims to strengthen its position in the sector by adding system capabilities for software-defined vehicles. For Fiscal 2026, Marvell’s Automotive Ethernet segment is expected to generate revenues between $225 million and $250 million, with gross margins of roughly 60%.
Marvell is one of the major players in the semiconductor industry, providing custom silicon and data center connectivity (networking) solutions for applications across the enterprise, cloud, automotive, and industrial markets. In Q4FY25, data center solutions contributed 75% of Marvell’s total revenues, and the company aims to fortify this business as its core expertise. Marvell has partnered with major hyperscalers, ensuring steady growth for its AI business. Plus, Marvell is increasing its share in data center infrastructure market by providing accelerated computing, high-speed optics, and networking solutions.
Marvell’s CEO, Matt Murphy, is excited about the deal, as it is expected to bring significant returns for the company’s shareholders. The company plans to discuss further details of the transaction during its conference call for the first quarter of Fiscal 2026, scheduled on May 29, 2025.
Is MRVL a Good Stock to Buy Right Now?
Wall Street remains highly optimistic about Marvell Technology’s stock trajectory. On TipRanks, MRVL stock has a Strong Buy consensus rating based on 29 Buys and two Hold ratings. Also, the average Marvell Technology price target of $117.03 implies an impressive 129.5% upside potential from current levels. Meanwhile, MRVL stock has lost 28.9% in the past year.
