Marvell Technology MRVL shares have skyrocketed 363% in the past year, outperforming the Zacks Electronics - Semiconductors industry and Zacks Computer and Technology sector’s return of 129.5% and 51.5%, respectively.
MRVL One-Year Performance Chart
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The massive rise in the stock price has primarily been due to rapid scale-out in the AI data center space, where MRVL provides its semiconductor products. Let’s dive into the fundamentals of the stock and discuss what investors should do with MRVL right now.
MRVL Gains Traction in Its AI Data Center Product Portfolio
Marvell Technology’s data center business is gaining strong traction as AI spending from large cloud customers continues to rise. With AI server deployments increasing, demand for faster networking, lower latency and higher bandwidth is expanding across MRVL’s interconnect portfolio.
In the first quarter of fiscal 2027, Marvell Technology delivered record revenues of $2.418 billion, and the data center segment accounted for 76% of total revenues. Marvell Technology’s interconnect and switching businesses are showing particularly strong momentum. The company now expects interconnect revenues to grow more than 70% year over year in fiscal 2027.
MRVL’s scale-out switch revenues are expected to exceed $600 million in fiscal 2027 and reach more than a $1 billion annualized run rate in fiscal 2028. Stronger demand for 1.6T solutions, coherent light, and scale-up networking provides a broader opportunity in scale-up optics.
Custom silicon is another major growth driver. MRVL said custom revenues remain on track to grow more than 20% year over year in fiscal 2027, led by its flagship XPU program and XPU attach programs in NIC and CXL. For fiscal 2028, the company now expects custom revenues to more than double year over year.
Furthermore, MRVL’s expanded partnership with NVIDIA further strengthens Marvell’s position in next-generation AI infrastructure, linking Marvell Technology’s custom silicon and optical networking capabilities with NVLink Fusion, optics, and AI-RAN opportunities. Both top and bottom lines are benefiting from these dynamics. The Zacks Consensus Estimate for MRVL’s fiscal 2027 earnings shows 35% year-over-year growth. The consensus estimate have been revised upward in the past seven days.
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MRVL Grapples With Stiff Competition in the AI Chip Market
Macroeconomic and geopolitical uncertainties remain a meaningful overhang on Marvell Technology’s near-term performance. Global trade tensions, evolving U.S. chip export restrictions and tariffs create operational and demand-side risks, particularly given MRVL’s reliance on hyperscalers and global supply chains.
Marvell Technology’s rapid growth in AI-driven custom silicon is heavily tied to hyperscalers, creating concentration risk. In the fourth quarter of fiscal 2026, 74% of total revenues came from data centers, with more than 90% of that tied to AI and cloud hyperscaler demand. The company faces stiff competition in the networking and custom silicon space from Broadcom AVGO, Astera Labs ALAB and Advanced Micro Devices AMD.
Broadcom is a leader in the domain of custom silicon solutions for data centers. Broadcom’s advanced 3.5D XDSiP packaging platform is critical to ensure the performance and efficiency of custom AI XPUs. Advanced Micro Devices is another established player in the custom silicon solutions and AI accelerator market.
Advanced Micro Devices offers semi-custom SoCs and Instinct Accelerators to power data centers. Astera Labs’ Leo CXL smart memory controllers are built for memory expansion up to two terabytes and improve interoperability to accelerate AI performance and cloud computing.
Marvell Technology Stock Trades at a Premium
The outperformance led to the premium valuation with MRVL stock trading at a P/E multiple of 89.16x, much above the industry P/E multiple of 41.13x. The premium valuation is further established by the Zacks Value Score of F.
MRVL Forward 12-Month (P/E) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: Hold MRVL Stock for Now
MRVL remains one of the strongest beneficiaries of the AI infrastructure buildout, with accelerating growth across interconnect, switching, custom silicon and optical networking. Rising AI spending by hyperscalers, expanding design wins and a deepening partnership with NVIDIA provide substantial long-term growth opportunities. However, MRVL trades at a significant premium to the industry average and also faces stiff competition, leaving limited room for execution missteps. Given these factors, we suggest that investors should retain this Zacks Rank #3 (Hold) Stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).