Marvell Technology: A High-Conviction AI Infrastructure Play for 2026

The AI infrastructure boom is reshaping the semiconductor landscape, and Marvell Technology (MRVL) has emerged as a standout contender. With a 78% year-over-year surge in data center revenue in Q4 2025, the company is capitalizing on the insatiable demand for high-performance computing. As hyperscaler CAPEX is projected to hit $602 billion in 2026, Marvell's strategic focus on custom AI silicon and interconnect solutions positions it to outpace peers like Nvidia and Broadcom while trading at a compelling valuation discount.

A Data Center Powerhouse in the AI Era

Marvell's Q4 2025 results underscore its transformation into a data center-centric growth engine. The segment accounted for 75% of total revenue, driven by a 78% year-over-year increase. This growth was fueled by demand for 800G PAM DSPs, 400ZR DCI solutions, and advancements in CPO (Co-Packaged Optics) and LPO (Laser-Powered Optics) technologies which are critical for hyperscalers building AI clusters. These innovations are critical for hyperscalers building AI clusters, where interconnect bandwidth and energy efficiency are paramount.

The company's custom XPU programs and partnerships with hyperscalers further solidify its role in the AI supply chain. For FY 2026, Marvell expects data center revenue to grow by 62% year-over-year, reflecting its ability to scale with the AI infrastructure cycle.

Undervalued Growth in a High-Growth Sector

While Nvidia and Broadcom dominate headlines, their valuations raise concerns for long-term investors. Nvidia, with a P/E ratio of 45.8x, trades at a premium despite its 78% year-over-year revenue growth in Q4 2025. Its $4.3 trillion market cap reflects market optimism but leaves little room for upside if growth moderates. Broadcom, valued at $1.6 trillion even as its AI revenue surged 74% in Q4 2025, similarly trades at a steep multiple.

In contrast, Marvell offers a compelling alternative. Its P/E ratio of 28.4–31.49x is significantly lower than its historical average of 54.41x suggesting undervaluation. At a market cap of $69.6–71.3 billion Marvell is priced at a fraction of its peers despite matching their growth trajectory. For context, Marvell's data center revenue growth of 78% in Q4 2025 outpaces Broadcom's 74% AI revenue increase while its non-GAAP gross margin of 60.1% demonstrates operational discipline.

The $602 Billion Hyperscaler Opportunity

The AI infrastructure tailwinds are no longer speculative. According to CreditSights, 75% of the $602 billion in 2026 hyperscaler CAPEX will target AI-specific investments, translating to $450 billion in direct spending. This represents a 64% year-over-year jump in AI CAPEX, creating a massive runway for companies like Marvell.

Marvell's product portfolio is uniquely aligned with this demand. Its custom silicon and interconnect solutions are essential for hyperscalers deploying AI clusters, where bandwidth and latency are critical. The company's CPO and LPO technologies, which integrate optics directly into chips, reduce costs and power consumption-key differentiators in an era where energy efficiency is a top priority.

A Conviction-Building Investment Thesis

Marvell's combination of high-growth fundamentals and attractive valuation makes it a standout in the AI chip sector. While Nvidia and Broadcom trade at multiples that assume perpetual growth, Marvell offers a more conservative entry point for investors seeking exposure to the AI infrastructure boom. Its Q4 2025 results, including $1.817 billion in revenue and $531.4 million in non-GAAP net income demonstrate execution excellence.

Looking ahead, Marvell's guidance for Q1 2026 revenue of $1.875 billion-a 62% year-over-year increase-signals continued momentum. With $602 billion in hyperscaler CAPEX on the horizon the company is well-positioned to outperform, as it scales its custom AI silicon and interconnect offerings.

For investors seeking a high-conviction play on the AI infrastructure cycle, Marvell Technology offers a rare blend of growth, innovation, and valuation discipline.