Marvell Technology Inc. (NASDAQ:MRVL) is gaining fresh momentum as Amazon.com Inc.’s (NASDAQ:AMZN) expanding Trainium chip deployments and surging cloud capital spending signal accelerating demand for Marvell's AI-focused ASIC and optical products.
The developments strengthen visibility into growth through 2026, underscoring the company's pivotal role in next-generation data infrastructure.
J.P. Morgan analyst Harlan Sur reaffirmed an Overweight rating and projected the stock to reach $120 by December 2026, citing the chipmaker's growing role in the AI infrastructure boom.
Sur noted that Marvell is rapidly cementing its position as a key enabler of next-generation data centers, benefiting from accelerating demand for custom AI silicon and high-speed optical connectivity solutions that power hyperscale cloud networks.
Sur highlighted that recent updates from Amazon and other cloud leaders reinforce a robust near-term and 2026 outlook for Marvell.
Amazon's advances in its Trainium 2 and Trainium 3 programs, along with rising capital expenditures from hyperscalers, are expected to serve as powerful tailwinds for Marvell's AI-focused ASIC and optical networking businesses.
According to the analyst, Amazon's Project Rainier is on track to run more than 1 million Trainium 2 chips by year-end, doubling from the current 500,000, while Trainium 3 will be previewed to customers later this year and broadly deployed in early 2026.
These developments align with strong demand signals from Teradyne's (NASDAQ:TER) recent results, which point to large-scale deployments of Trainium 2 and 3 in late 2025 and 2026 — a critical growth driver for Marvell's custom ASIC business.
Sur expects Marvell's custom ASIC segment to grow 18–20% in 2026, supported by continued collaboration with Amazon on next-generation 2nm Trainium 4 technology.
He also noted that Amazon's 2025 capital expenditures (capex) have climbed to $125 billion, up from roughly $118.5 billion, with further increases anticipated in 2026.
Similar spending trajectories across major hyperscalers are expected to accelerate demand for Marvell's optical connectivity products, which could outpace growth in its ASIC segment next year.
Sur's Overweight thesis is anchored in Marvell's strategic transformation following the Inphi acquisition in 2021, which positioned it as a leader in optical connectivity and enhanced synergies across its storage, networking, and embedded processing franchises.
J.P. Morgan's $120 price forecast assumes a 33x P/E multiple on projected fiscal 2027 earnings of $3.60 per share, in line with AI and networking peers.
Price Action: MRVL shares were trading higher by 4.79% to $92.81 at last check Friday.
Read Next:
Photo via Shutterstock
