Marvell Technology Targets $18B as AI Networking and Optics Fuel Growth

Key Points

• Marvell significantly raised its growth outlook, targeting approximately $12 billion in revenue this year and $18 billion next year, driven by AI data-center demand, product execution and expanded supply-chain capacity.
• AI networking and optical connectivity are emerging as major growth engines. Marvell expects strong opportunities in scale-up networking, Teralynx switching, NPO/CPO optics and the transition from 800G to 1.6T data-center interconnects.
• Marvell has more than 20 custom AI-silicon design wins across four major U.S. hyperscalers, while management expects operating margins to reach the high end of its 38%–40% target range next year despite a rising custom-silicon mix.

Marvell Technology NASDAQ: MRVL executives outlined the company’s expanding role in AI data-center infrastructure at Citi’s Global TMT Conference, pointing to growth opportunities in networking, optical connectivity, custom silicon and supply-chain-backed capacity expansion.

Chairman and CEO Matt Murphy said Marvell’s strategy has centered on data centers since 2016, when data-center revenue accounted for 9% of the company’s fiscal 2017 revenue and was primarily tied to enterprise servers and storage. He said the company generated about $2.2 billion in data-center revenue in calendar 2023 and is targeting $15 billion to $16 billion next year.

“This has been a company we built brick by brick, year-by-year,” Murphy said, citing acquisitions, divestitures and organic investment. He said the company’s long-term focus on data infrastructure positioned it to benefit from the rise of generative AI.

Scale-Up Networking and Optical Connectivity

Murphy identified scale-up networking as a significant future opportunity, combining switching platforms with near-packaged optics, or NPO, and co-packaged optics, or CPO. Marvell’s Teralynx switching platform, acquired through Innovium, is on track to exceed $1 billion in revenue, according to Murphy. He said the business had initially been projected to generate about $150 million in revenue.

The company is pursuing multiple networking standards, including Ethernet-based scale-up networking, UALink and NVIDIA’s NVLink. Murphy said Marvell’s electrical SerDes technology, optical offerings and switching portfolio allow it to pursue several approaches as the market develops.

“There is a lot of shots on goal for us on scale up networking,” Murphy said. While NVLink currently dominates the market, he said the growing need to connect more GPUs and XPUs should create a new market over the next several years.

Marvell has invested in NPO technology for at least five years, Murphy said, including through its acquisition of Inphi. He added that the December 2025 acquisition of Celestial AI expanded Marvell’s CPO capabilities. The company expects NPO and CPO to coexist alongside copper connectivity rather than replace one another immediately.

Murphy said Marvell expects revenue from broadband analog, NPO and CPO products to increase from effectively zero this year. The company previously forecast a $0 to $300 million contribution next year, but Murphy said the expected figure is now “much higher,” with networking and scale-up optics contributing to its increased outlook.

Data Center Interconnect and Custom Silicon

Marvell also expects continued growth in data-center interconnect, or DCI, as customers transition from 800G to 1.6T connectivity. Murphy said the company was first to announce 2-nanometer DSPs for 1.6T modules and cited customer demand, silicon photonics progress and 15 billion device hours of performance and reliability data.

Beyond traditional DCI, Murphy said “scale-across” architectures could expand the addressable market by two to five times. He said Marvell is investing in both components and manufacturing capacity for DCI modules, while also selling DSPs to third-party module providers.

On custom AI silicon, Murphy said Marvell’s custom capabilities originated with its acquisition of Avera, which brought a long-standing ASIC team formerly associated with IBM and GlobalFoundries. He said Marvell has more than 20 design wins across the four major U.S. hyperscalers involving XPUs and “XPU-attach” products.

Murphy characterized Marvell’s recently disclosed Google relationship as an XPU-attach engagement spanning product categories including network interface controllers, CXL, storage controllers, near-memory compute and AI acceleration. He did not provide a timetable for revenue from that arrangement, saying Marvell would provide more context at its upcoming Investor Day.

He emphasized that Marvell’s custom business is intended to be diversified across customers and product sockets, while connectivity remains the company’s core franchise. “At the end of the day, it always comes down to the I/O,” Murphy said.

Growth, Margins and Supply Chain

Murphy said Marvell’s outlook has increased substantially over the past year. A year earlier, he said the company expected roughly $9.5 billion in revenue for fiscal 2027 and more than $11 billion in fiscal 2028, or about $20 billion combined. Marvell has since said it can generate $12 billion this year and $18 billion next year, totaling $30 billion over the two-year period.

He attributed the increase to stronger demand, higher capital spending by customers, product execution, connectivity growth and supply-chain expansion. Marvell has secured longer-term arrangements across its supply chain, including with TSMC, substrates and backend capacity providers, Murphy said.

CFO Dan Durn said the company is prioritizing investments in its most material growth and profitability opportunities. He said operating expenses are expected to grow at roughly half the rate of revenue, creating operating leverage.

• Marvell expects to exit the current year within its long-term operating-margin target of 38% to 40%.
• The company expects to exit next year at the top end of that range, Durn said.
• Marvell plans to update its longer-term operating-margin target at its Analyst Day.

Durn acknowledged that increasing custom-silicon mix can modestly reduce gross margin, but said the business can support attractive operating margins because customers provide funding for development work. He said Marvell expects operating-margin expansion even as its custom business grows.

On capital allocation, Durn said Marvell’s priorities are investing for growth, maintaining a strong and flexible balance sheet, and returning excess cash to shareholders through dividends and share repurchases. He added that the company is also using capital to address potential supply-chain constraints before they limit growth.

Looking beyond fiscal 2029, Murphy said the combination of switching and optics in scale-up networking could become Marvell’s next major growth engine, while existing interconnect products continue to benefit from higher speeds, rising optical attachment rates and the transition from 800G to 1.6T and eventually 3.2T.

About Marvell Technology (NASDAQ:MRVL)

Marvell Technology, Inc NASDAQ: MRVL is a semiconductor company that develops infrastructure solutions for data centers, cloud computing, communications networks, automotive applications and enterprise environments. Its products are designed to move, process, secure and store data across increasingly complex computing and networking systems.

The company's portfolio includes networking and switching products, optical and electrical interconnect solutions, custom application-specific integrated circuits, storage controllers and processors.

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