Marvell Technology (MRVL) is nearing a deal to acquire artificial intelligence (AI) startup Celestial AI, ahead of its Q3FY26 results scheduled for today. According to The Information, the chipmaker is considering a cash-and-stock deal worth billions, potentially exceeding $5 billion including earnouts tied to product milestones. The announcement could come as soon as Tuesday.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
Marvell designs and develops semiconductors for data infrastructure solutions, focusing on cloud computing, AI, 5G, networking, storage, and automotive applications. Celestial AI develops photonic technology that uses light instead of copper wires to accelerate data transfer inside data centers. This approach significantly speeds up data movement within AI systems, which is crucial for handling large and complex AI models.
Here’s Why Marvell Is Eyeing Celestial AI
Marvell competes with larger custom chipmakers such as Broadcom (AVGO) in the rapidly growing AI hardware market. If Marvell’s deal goes through, it could change the competitive landscape for powerful AI chips. Marvell currently sells high-speed chips like SerDes, switches, and other network parts used by cloud companies. Adding photonic interconnects could improve Marvell’s products by linking electrical chips with optical technology. This link currently limits the speed for very large AI models. Marvell sees integrated photonics as an important future focus.
Acquiring Celestial AI would free Marvell from relying on third-party optical technology. Owning this technology can speed up product development and help Marvell cross-sell to big cloud customers already using its chips.
Celestial AI, backed by a division of Advanced Micro Devices (AMD), raised $250 million in venture capital funding in March 2025, increasing its total capital raised to $515 million. The company also has Intel (INTC) CEO Lip-Bu Tan serving on its board.
Is MRVL Stock a Buy Ahead of Earnings?
Analysts remain divided about Marvell’s long-term outlook. On TipRanks, MRVL stock has a Moderate Buy consensus rating based on 13 Buys and six Hold ratings. The average Marvell Technology price target of $97 implies 6.5% upside potential from current levels. Year-to-date, MRVL stock has lost 17.3%.
