Marvell Technology, Inc. (MRVL)

Let's get the hard part over with first and address the risks because they're not trivial.

1. Marvell is expensive - on any metric.
2. The high valuation requires near-perfect execution
3. The high valuation requires a favorable macro environment - doveish fed, hyperscalers capex spending to continue without significant stock price disruptions
4. Competition is growing

1. AI data-center revenue is scaling fast: FY28 revenue guide of $16.5B implies Marvell nearly doubles from FY26.
2. Custom silicon + optics are the key drivers: hyperscalers need ASICs, optical interconnect, switching, and data movement infrastructure.
3. As the industry looks reduce their dependencies on Nvidia, Marvell is well-positioned to drive growth in world heteregenous compute.
4. The stock god, Jensen Huang, said Marvell will go up.
5. See point above.

Test

Test

Marvell offers differentiated exposure to AI infrastructure versus a pure Nvidia position. While Nvidia remains the dominant GPU platform, hyperscalers are increasingly investing in custom silicon to optimize performance, cost, and power consumption for specific workloads, and Marvell captures that shift through custom XPUs, ASIC programs, optical interconnect, and high-speed networking. This does not make Marvell a hedge against AI demand — both companies depend on continued data-center capex — but it does make it a hedge against a GPU-only view of the AI compute stack.

A concrete example is the five-year agreement Marvell signed with AWS in December 2024 to supply a broad range of data-center semiconductors, spanning custom AI silicon, optical digital signal processors (DSPs), active electrical cable (AEC) DSPs, PCIe retimers, data-center interconnect (DCI) optical modules, and Ethernet switching silicon.¹

1. FY28 revenue guided to $16.5B. Management raised the FY2028 outlook to $16.5B, about 45% above the FY2027 base of nearly $11.5B and roughly $1.5B higher than the prior outlook.
2. Data center is 76% of revenue. Data center reached $1,832.7M in Q1 FY27 out of $2,417.8M total, and management expects it to grow about 50% this fiscal year on interconnect, switching, and custom silicon.
3. Path to 50% returns by 2028. A 20x sales multiple on the guided $16.5B FY2028 revenue implies a $330B market cap, about 1.5x today's $220B.
4. Non-GAAP operating margin target 38% to 40%. Q1 FY27 non-GAAP operating margin was 35%, and management targets the upper end of its 38% to 40% model as data center scales.
5. Forward P/E glides to 69x by FY28. Assuming net income margins of 29%, FY 28 net income is ~5 bln, resulting in a P/E ratio of 69x.