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While Nvidia (NVDA) remains the poster child for the artificial intelligence (AI) boom, many smaller players are gaining traction and could be solid investments in the long term. Valued at $53.1 billion, Marvell Technology (MRVL) is a semiconductor company that designs and develops integrated circuits (chips), primarily for data infrastructure. Its products run everything from cloud data centers to 5G networks, automotive systems, and enterprise storage.
Marvell began its fiscal year 2026 with a strong performance, reporting record first-quarter revenue and earnings driven by explosive growth in AI demand and rapid momentum in its custom silicon business.
Despite a solid quarter, the stock has fallen 43.6% year to date, compared to the broader market’s 1.1% gain. Nonetheless, Wall Street considers Marvell stock a “Strong Buy.”
Marvell’s Data Center Segment Fuels Exceptional Growth in Q1
Total revenue exceeded the company’s midpoint guidance, increasing by 63% year on year to $1.895 billion. Furthermore, adjusted net income for the quarter stood at $0.62 per diluted share, a 158% increase year-over-year. Revenue and earnings also exceeded Wall Street expectations. The standout performer in the quarter was Marvell’s Data Center end market, accounting for $1.44 billion, or 76% of total revenue. This represents a staggering 76% year-over-year increase. The company attributes this acceleration to high-volume production of its custom AI silicon programs, as well as strong shipments of electro-optics products designed for AI and cloud infrastructure.
While the Data Center business dominated, other segments showed promising results. Enterprise Networking generated $178 million in revenue, while Carrier Infrastructure brought in $138 million. They grew 14% sequentially, extending their post-pandemic recovery. While consumer revenue fell 29% sequentially, management expects it to rebound by about 50% in Q2, owing to seasonal gaming demand. Automotive and industrial revenue also fell 12% sequentially due to fluctuating industrial orders. Both segments’ revenue could be flat in the second quarter.
CEO Matt Murphy emphasized that AI now accounts for the majority of Marvell’s data center revenue, and the company expects this proportion to grow in the coming years. During the first quarter, Marvell announced the sale of its Automotive Ethernet business to Infineon for $2.5 billion in cash as part of a major strategic shift aimed at streamlining operations and increasing capital allocation flexibility. The transaction is expected to close in calendar year 2025.
Meanwhile, the company strengthened its custom silicon platform by forming a new partnership with Nvidia (NVDA) and incorporating NVLink Fusion into its XPU roadmap to create more scalable AI architecture. During the Q1 earnings call, management also mentioned that the company had introduced a multi-die packaging platform, which is already in production and allows for more efficient, cost-effective system design using Marvell’s proprietary interposer technology.
On the balance sheet, the company had cash and cash equivalents totaling $885.9 million. Its debt-to-equity ratio is also low (0.3x), indicating a stable balance sheet. During the quarter, Marvell returned $340 million to shareholders through stock buybacks. Murphy stated, “As the industry continues to move toward building custom AI infrastructure, Marvell is uniquely positioned at the center of this transformation. We see our custom silicon business driving strong growth in the second quarter and beyond.”
On that note, the company expects revenue of $2 billion (plus or minus 5%), representing a 57% year-over-year increase. According to management, AI momentum, multi-program custom silicon expansion, and growth in networking infrastructure could be the primary drivers of this growth. Additionally, adjusted diluted income per share may be $0.67 (plus or minus $0.05) per share.
Investors should keep an eye out for Marvell’s upcoming Custom AI Investor Event on June 17, which will highlight the company’s advanced semiconductor IP, packaging innovations, and long-term custom silicon growth strategy. Investors will get more insight into how Marvell is positioning itself as a key player in the rapidly evolving AI hardware ecosystem.
What Are Analysts Saying About MRVL Stock?
Overall, analysts maintain a positive outlook on Marvell’s long-term prospects, rating it a “Strong Buy.” Out of the 32 analysts covering MRVL, 24 have rated it a “Strong Buy,” three have a “Moderate Buy” recommendation, and five suggest a “Hold.” The average price target for MRVL stock is $92.07, which implies potential upside of 46% from current levels. Additionally, its high target price of $133 implies potential upside of 111% in the next 12 months.
