Marvell: A Rare AI Entry Point Before ASIC Demand Hits Full Volume

The artificial intelligence (AI) revolution is reshaping global technology infrastructure, and few companies are positioned as strategically as Marvell Technology (NASDAQ: MRVL). As hyperscalers and cloud providers race to deploy generative AI capabilities, Marvell’s dominance in custom application-specific integrated circuits (ASICs) and data center solutions is unlocking a unique value proposition for growth investors. With data center revenue surging 69% year-over-year to $1.49 billion in Q2 2026 [1], a forward P/E ratio of 22.68 [2], and a total addressable market (TAM) expansion plan targeting 20% market share by 2028 [3], Marvell offers a rare combination of near-term momentum and long-term scalability.

The AI Infrastructure Play: Custom ASICs as a Growth Engine

Marvell’s strategic pivot to custom AI silicon has positioned it as a critical enabler of the AI infrastructure boom. The company’s data center segment now accounts for 74% of total revenue [4], driven by demand for its advanced electro-optics and custom ASICs tailored for AI workloads. According to a report by Marvell’s Q2 2026 earnings call, the company’s custom AI design activity reached an all-time high, with over 50 new opportunities engaged across more than 10 customers [5]. This includes partnerships with hyperscalers seeking to optimize AI training and inference efficiency, a trend that is expected to accelerate as generative AI adoption expands.

The company’s roadmap further underscores its leadership in this space. Management anticipates data center revenue growth in the mid-30% range for Q3 2026, with custom ASIC demand expected to surge in Q4 as inventory digestion phases conclude [6]. Analysts at Seeking Alpha note that Marvell’s AI revenue could exceed $2.5 billion in 2026, up from $1.5 billion in 2025, reflecting a 67% compound annual growth rate (CAGR) [7].

Valuation: A Discount to Broader Market Metrics

Despite its robust growth, Marvell trades at a compelling discount relative to broader market benchmarks. As of September 2025, the stock carries a forward P/E ratio of 22.68 [2], significantly below the Nasdaq-100’s forward P/E range of 32.44–34.19 [8]. This valuation gap highlights Marvell’s underappreciated role in the AI infrastructure ecosystem. For context, the Nasdaq-100’s forward P/E has historically averaged 30.00 over the past five years [9], meaning Marvell’s current multiple is 28% cheaper than the index’s five-year average.

The disparity becomes even more compelling when considering earnings growth expectations. Marvell’s projected revenue growth of 20–25% over the next several quarters [10], coupled with data center revenue growth potentially exceeding 35% YoY [11], suggests the stock is undervalued on a price-to-earnings-growth (PEG) basis. With a PEG ratio of 0.64 [12], Marvell ranks as one of the most attractively valued AI infrastructure plays.

Strategic Positioning: Ahead of Full-Volume ASIC Demand

Marvell’s competitive advantage lies in its ability to anticipate and scale with the next phase of AI demand. While current revenue is driven by early-stage AI deployments, the company is already preparing for the next wave of ASIC demand. Its expanded TAM for data centers—projected to grow from $130 billion in 2024 to $200 billion by 2028 [13]—reflects the long-term tailwinds of AI-driven cloud infrastructure spending.

Moreover, Marvell’s vertical integration in silicon design, packaging, and electro-optics gives it a unique edge over peers. As hyperscalers seek to reduce latency and improve energy efficiency in AI workloads, Marvell’s end-to-end solutions are becoming increasingly indispensable. This is evident in its Q2 2026 results, where data center revenue growth outpaced overall company revenue growth (58% YoY for total revenue [14]), signaling a structural shift in its business model.

Risks and Considerations

Investors should remain mindful of near-term volatility. Marvell’s Q3 guidance for flat data center revenue [15] reflects short-term inventory digestion challenges in the hyperscaler sector. However, these are viewed as temporary headwinds rather than structural issues. Additionally, the company faces competition from established players like Broadcom and NVIDIA, though its focus on custom ASICs and niche markets provides a moat against commoditization.

Conclusion: A Value-Driven Growth Opportunity

Marvell Technology represents a rare intersection of value and growth in the AI infrastructure sector. Its leadership in custom ASICs, dominant data center revenue growth, and attractive valuation metrics make it an ideal entry point for investors seeking exposure to the next phase of the AI revolution. As full-volume ASIC demand accelerates in 2026, Marvell’s strategic positioning and operational execution suggest it is poised to outperform both its peers and the broader market.

Source:
[1] Marvell Technology, Inc. Reports Second Quarter of Fiscal Year 2026 Financial Results [https://investor.marvell.com/2025-08-28-Marvell-Technology,-Inc-Reports-Second-Quarter-of-Fiscal-Year-2026-Financial-Results]
[2] MRVL (Marvell Technology) Forward PE Ratio [https://www.gurufocus.com/term/forward-pe-ratio/MRVL]
[3] Marvell Q2 FY 2026 Results: Healthy Data Center Growth [https://futurumgroup.com/insights/marvell-q2-fy-2026-earnings-data-center-growth-healthy-but-overshadowed-by-rising-competition/]
[4] Marvell Q2 FY2026 presentation: data center revenue surges to 74% of total [https://www.investing.com/news/company-news/marvell-q2-fy2026-presentation-data-center-revenue-surges-to-74-of-total-93CH-4215458]
[5] Marvell Technology Inc Earnings Call Summary for Q2/2026 [https://www.investing.com/equities/marvell-technology-group-ltd]
[6] MRVL Q2 2026: Revenue Surges 58% YoY to $2.006B [https://mlq.ai/news/mrvl-q2-2026-revenue-surges-58-yoy-to-2006b-eps-jumps-123-to-067/]
[7] Top Technology Themes for 2025 [https://www.synovus.com/personal/resource-center/monthly-trust-newsletters/2025/january/top-technology-themes-for-2025]
[8] Nasdaq 100 Index: current P/E Ratio [https://worldperatio.com/index/nasdaq-100/]
[9] Nasdaq 100 PE Ratio Charts, Data [https://www.gurufocus.com/economic_indicators/6778/nasdaq-100-pe-ratio]
[10] Marvell: AI Infrastructure Value Play Of The Year [https://seekingalpha.com/article/4818808-marvell-ai-infrastructure-value-play-of-the-year]
[11] Marvell Technology (MRVL) Research Report [https://stockstory.org/us/stocks/nasdaq/mrvl]
[12] Marvell Technology (MRVL) Stock Forecast: Analyst Ratings [https://public.com/stocks/mrvl/forecast-price-target]
[13] Marvell: A Rare AI Entry Point Before ASIC Demand Hits Full Volume [https://seekingalpha.com/article/4818808-marvell-ai-infrastructure-value-play-of-the-year]
[14] Marvell Revenue Jumps 58% in Fiscal Q2 [https://www.nasdaq.com/articles/marvell-revenue-jumps-58-fiscal-q2]
[15] Marvell slips on data center lull [https://www.linkedin.com/news/story/marvell-slips-on-data-center-lull-6517500/]