Marvell Says Connecting AI Chips Could Be a $37 Billion Business—These 2 Stocks Rallied Too

Key Points

• Marvell Technology projected fiscal 2031 revenue of $70 billion to $90 billion at its Oct. 6 Investor Day, lifting shares and related stocks.
• Ciena and Astera Labs rose on Marvell's news, but each remains heavily dependent on a small number of major AI-related customers.
• Both stocks trade at elevated valuations, with Ciena's P/E above 97 and Astera Labs' exceeding 170, raising sustainability questions for investors.

Marvell Technology Inc. NASDAQ: MRVL is aiming for the stratosphere, and so far, investors seem willing to bet that the semiconductor maker will achieve its goal. At the company's Oct. 6 Investor Day, it outlined a massively ambitious revenue growth trajectory that could lead to a projected $70 billion to $90 billion in fiscal 2031 revenue.

Many factors could contribute to this significant and sustained growth period—the forecast suggests a minimum annualized growth rate of 54% over the coming five years—but one of the most important is the company's business connecting AI chips to data centers.

This segment could draw about $37.5 billion per year by the fiscal 2031 target, Marvell representatives projected.

The Investor Day news sent MRVL stock upward, but it also buoyed two other names: Ciena Corp. NYSE: CIEN and Astera Labs Inc. NASDAQ: ALAB. Investors must determine whether these companies share the same growth prospects or if those stocks are simply riding the excitement Marvell generated.

Ciena: Strong AI Demand Fuels Growth Despite Customer Concentration Risks

Ciena's network technology business is complementary to Marvell's—the firm sells the optical networking equipment that links data centers together. Marvell's success in the AI chip space would not preclude Ciena from also seeing surging business. The question is how much of Ciena's revenue is already tied to AI customers, and what the potential for further growth in that area is.

Ciena CEO Gary Smith suggested in a recent earnings call that the company's total addressable market may double in the coming three years to about $50 billion by 2029. This would be driven largely by data center demand.

The company reported cloud and hyperscaler revenue accounting for 53% of its $1.67 billion in total revenue in the latest quarter. While the firm does not break out data center financials in a granular way, it is clear that AI clients represent a substantial portion of its customer base.

Despite demand that significantly eclipses supply (backlog rose by $800 million for the latest quarter alone), Ciena is reliant on a small number of major customers. Last quarter, two clients each represented at least 10% of quarterly sales. This potentially leaves the company vulnerable should one of its biggest clients reduce its orders or move to a competitor.

Shares of CIEN were up more than 11% immediately following Marvell's Investor Day, bringing the company to a lofty price-to-earnings ratio (P/E) above 97. The stock is up nearly 77% year to date (YTD), but analysts still expect shares to continue rising. More than three-quarters of analysts have rated CIEN a Buy.

Astera Labs: Strong AI Growth Comes With Added Risks

Marvell's news also boosted shares of Astera Labs, which climbed about 7.5% after the announcement. This fabless semiconductor maker is a more direct competitor to Marvell, owing to its focus on chips that facilitate communication between processors and components within servers.

Astera operates on a smaller scale than Marvell, with last quarter's revenue reaching up to $392 million, more than double year over year (YOY). Where the company may have an advantage is in its nearly complete integration into the AI industry—essentially all of its revenue is tied to AI infrastructure in one way or another. This could bode well for the company if Marvell's predictions about its own AI revenue come true.

On the other hand, Astera is even more heavily reliant on a small number of customers: Amazon.com Inc. NASDAQ: AMZN accounts for roughly 70% of Astera's revenue via its Amazon Web Services platform. This presents added risk to investors concerned about whether big tech companies will continue to grow their investments in AI infrastructure—and more specifically, in third-party infrastructure—in the coming years.

ALAB shares have almost doubled in 2026 so far, and Wall Street thinks that the pace of growth may not be sustainable; the company has about 2% in downside potential based on estimates. At the same time, it trades at an even loftier valuation than Ciena's, with a P/E ratio exceeding 170.

Investors should keep in mind that Marvell's revenue target was for its own company and does not necessarily mean that this is a market either Ciena or Astera Labs will share. Indeed, there is no report that ties the recent share price gains for either CIEN or ALAB directly to Marvell. It remains an exciting time to be in the AI semiconductor business, but the future may treat some of these firms more favorably than others.