Marvell revenue surges 27.6% to $2.42B on AI interconnect demand

Marvell Technology’s stock surged to $211 on August 6 as investors bet on its role in powering the next wave of AI infrastructure. The chipmaker’s recent earnings show a 27.6% revenue jump to $2.42 billion, driven by a 27.2% surge in its data center business to $1.83 billion. With AI giants racing to build larger, more complex computing clusters, Marvell’s networking and interconnect chips are in high demand. But its premium valuation—trading at 20 times sales and 51 times forward earnings—hinges on whether this growth can last.

The company’s success reflects a broader shift in AI hardware. As AI systems grow, they need faster connections between processors, memory, and networking gear. Marvell supplies the interconnects, custom chips, and networking gear that keep these systems running smoothly. Data center revenue now makes up 76% of its total, up from earlier years, proving this is more than a passing trend. Analysts argue the demand won’t fade soon, especially as AI workloads become more intensive.

Management is doubling down on the bet. It raised its fiscal 2028 revenue forecast to $16.5 billion, an increase of $1.5 billion, with interconnect growth expected to top 70% next year. A new partnership with NVIDIA, covering silicon photonics and AI radio networking, adds another revenue stream. Profitability is improving too—gross margins hit 52%, up nearly 2%, while free cash flow margins climbed to 20%. These numbers suggest Marvell isn’t just growing fast; it’s becoming more efficient.

The question now is whether Marvell can justify its lofty valuation. If AI demand slows, its stock could face pressure. But if the buildout of AI infrastructure accelerates, Marvell’s interconnect and networking business could keep expanding for years. Investors are betting on the latter—though the stock’s high multiples mean the risk is real. The next quarters will show if Marvell can deliver on its promise.