MRVL's Data Center Revenues Hit $6.1B: Can the Momentum Continue?

Marvell Technology MRVL posted strong results in fiscal 2026, with 74.4% of revenues coming from the data center business, which reached $6.1 billion. Given the contribution to MRVL’s top line and the year-over-year growth rate of 46.5%, the data center business has now become the main growth engine for MRVL.

MRVL’s data center business is gaining traction on the back of artificial intelligence (AI) spending by large cloud customers. As these customers add more AI servers, they need faster and more reliable networking. Based on the current growth trend, MRVL predicts that its interconnect business will grow more than 50% in fiscal 2027.

MRVL’s custom AI silicon products and next-generation switch offerings are also gaining traction. While MRVL’s data center switching solutions showed a strong growth in fiscal 2026, with revenues crossing $300 million on the back of scale-out applications, custom silicon reached $1.5 billion.

Looking ahead, MRVL expects its switching solutions to grow beyond $600 million in fiscal 2027. MRVL expects its custom silicon to grow 20% year over year in fiscal 2027. AEC and retimers are expected to double in fiscal 2027, driving the data center business. This outlook is supported by continued AI investments and higher product use inside AI systems.

MRVL’s wide data center product lineup puts it in a good position to benefit if AI infrastructure spending continues, while the recent geopolitical concerns remain an overhang on the execution. The Zacks Consensus Estimate for MRVL's 2027 revenues suggests a year-over-year increase of 34.2%.

How Competitors Fare Against MRVL

Marvell Technology competes with Broadcom AVGO and Credo Technology CRDO in the connectivity market. Credo has a wide portfolio of AEC, SerDes IP, Retimer ICs and system design. Credo’s business is mainly driven by its strong AEC business, which posted double-digit sequential growth last quarter.

Credo’s hyperscaler customer base is expanding, while it is also experiencing robust growth in optical DSP and LRO solutions, along with rising PCIe and Ethernet retimer adoption. Broadcom has a stronghold in carrier Ethernet and transport markets and is a major player in telecom optical interconnects and routing silicon space. Broadcom’s advanced 3.5D XDSiPs are crucial for AI XPU connectivity due to higher density.

MRVL's Price Performance, Valuation and Estimates

Shares of Marvell Technology have gained 47.5% in the past year compared with the Zacks Electronics - Semiconductors industry’s growth of 72.9%.

MRVL One-Year Performance Chart

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From a valuation standpoint, Marvell Technology trades at a forward price-to-sales ratio of 7.50X, lower than the industry’s average of 7.57X.

MRVL Forward 12-Month (P/S) Valuation Chart

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The Zacks Consensus Estimate for MRVL’s fiscal 2027 and 2028 earnings implies year-over-year growth of 33.1% and 38.6%, respectively. The estimates for fiscal 2027 and 2028 have been revised upward in the past seven days.

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Marvell Technology currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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