Marvell Technology (MRVL): A 20% Pullback Creates a New Buying Opportunity
Marvell Technology (MRVL) has delivered another record quarter, raised its revenue outlook and expanded its relationships with some of the world’s largest technology companies. Yet its stock has pulled back roughly 20% from its 2026 high, giving investors a chance to buy into a business with several major growth catalysts still ahead.
The company has become an increasingly important supplier of custom semiconductors and connectivity technology for large data centers. And with demand accelerating across both businesses, we think the recent decline presents an attractive entry point for long-term investors.
Marvell’s latest quarterly results show just how quickly the business is growing. Revenue increased 37% year over year, while data center revenue jumped 46%. That segment now accounts for approximately 80% of total sales, giving Marvell substantial exposure to continued spending on advanced computing infrastructure.
Management also reported exceptionally strong AI-related bookings and raised its revenue outlook for both fiscal 2027 and fiscal 2028.
One of the biggest opportunities is Marvell’s custom silicon business. Rather than relying exclusively on standard, off-the-shelf processors, major technology companies are increasingly developing chips tailored to their own computing requirements. Marvell helps design and supply those specialized semiconductors, along with the supporting components needed to connect and operate them.
Its expanded relationship with Alphabet is a good example. Marvell is supplying a broad range of custom products for Google’s Tensor Processing Unit (TPU) ecosystem, including AI chips, storage and networking hardware, and memory interface products.
And Alphabet is only part of the opportunity.
Marvell is currently working on 18 custom AI chip projects for four major hyperscalers and several rapidly growing AI companies. Management expects its custom silicon business to accelerate significantly in the second half of fiscal 2027, providing another growth catalyst as demand for its existing data center products continues to increase.
But we think Marvell’s opportunity extends well beyond the processors themselves.
As data centers become larger and more complex, moving information efficiently between chips and servers becomes increasingly important. Marvell is positioning itself as a key supplier of the technology that makes those connections possible.
The company’s acquisition of Celestial AI adds Photonic Fabric technology, designed to provide high-speed, high-bandwidth optical connections across large computing systems. This opens up additional opportunities in scale-up interconnects, which allow more processors to work together efficiently.
Management expects the Celestial AI acquisition to begin contributing revenue in the second half of fiscal 2028, adding another potential growth driver beyond its existing business.
Marvell has also expanded its agreement with GlobalFoundries to increase semiconductor production capacity for high-speed optical connections. Combined with its existing switching, PCIe, CXL and memory interface products, these investments give Marvell a broader portfolio of technologies used to connect and support advanced computing systems.
That’s an important distinction. Marvell isn’t dependent on the success of a single chip design or customer relationship. It has multiple opportunities to benefit as large technology companies invest in custom processors, faster networking and more efficient connections between computing systems.
The recent share-price decline makes that growth story more interesting.
Marvell shares have tripled over the past 52 weeks but are now approximately 20% below their 2026 high. The stock trades around $275 per share, compared with a 52-week high of $329.88.
At approximately 37 times forward earnings, Marvell still commands a premium valuation. Investors are paying for substantial future growth, and the stock could remain volatile if spending slows or expectations aren’t met.
However, the company is delivering the kind of results that help support that premium. Revenue is growing 37%, its data center business is expanding even faster, and management has increased its outlook for the next two fiscal years.
More importantly, several of Marvell’s biggest opportunities are still developing. The expected acceleration in custom silicon during the second half of fiscal 2027 and the anticipated contribution from Celestial AI in the second half of fiscal 2028 provide potential catalysts beyond the company’s current growth.
We also like the strength of Marvell’s customer relationships. Working on 18 custom chip projects across four major hyperscalers and other AI companies gives it multiple opportunities to expand its business as those customers develop their next generations of computing hardware.
The stock’s substantial rally over the past year means investors should maintain realistic expectations. Another tripling of the share price is unlikely to come easily, particularly with the valuation already reflecting considerable optimism.
But we don’t think the recent pullback signals a deterioration in the business. Marvell continues to report strong demand, improving revenue growth and an expanding portfolio of products that address some of the most important challenges facing large data centers.
With shares roughly 20% below their 2026 high, we think Marvell Technology offers an attractive opportunity to establish a position ahead of its next phase of growth. Its custom silicon business is preparing to accelerate, its optical connectivity investments are opening new markets, and management’s higher revenue outlook suggests the company’s momentum is far from over.
