I keep hitting the buy button on Marvell Technology (NASDAQ:MRVL | MRVL Price Prediction), and the loudest bear argument against it, customer concentration, is the exact reason I keep buying more. Anyone telling you Marvell is one hyperscaler decision away from a cliff is working off a story that stopped matching the receipts a year ago.
What Actually Sits Inside That 76% Data Center Number
Yes, the data center segment produced 76% of total revenue in Q1 FY2027. Management describes custom AI design activity at an all-time high, with “over 50 new opportunities across more than 10 customers”. Marvell ships DCI solutions to all five major US hyperscalers and secured design wins with three Tier 1 US hyperscalers on its Golden Cable AEC program. That reads as broad platform participation across the entire buyer pool.
The piece that pushed me to a conviction position is the Google commercial agreement, a warrant tied to 240 distinct revenue tranches at $500 million each through 2033, incentivizing up to $120 billion in custom product purchases. When one of the world’s most disciplined buyers hands you a contract running almost a decade, that is an institutional moat wearing the mask of concentration. Layer on the Celestial AI acquisition, closed February 2, 2026, and XConn Technologies, closed February 10, 2026, and Marvell now owns photonic fabric and chiplet connectivity assets that carry it end-to-end from XPU to switch.
Numbers That Keep My Money Flowing In
Fiscal 2026 closed with revenue of $8.195 billion, up 42.09% and non-GAAP EPS of $2.84, up 81%. Q1 FY2027 followed with revenue of $2.418 billion, up 27.57% YoY, data center revenue of $1.8327 billion, a non-GAAP operating margin of 35.0%, and free cash flow of $483.1 million, up 126.81%. Cash and equivalents sit at $3.8436 billion, up 333.86% year over year.
Capital return backs the growth. Marvell repurchased $2,040.1 million of stock in fiscal 2026 and another $200 million in Q1 FY2027, while paying a $0.06 quarterly dividend. Management raised the outlook for both fiscal 2027 and fiscal 2028, guiding total-company fiscal 2028 revenue of approximately $16.5 billion with custom revenue more than doubling year over year.
Why I Pass on Broadcom and NVIDIA
Broadcom (NASDAQ:AVGO) is the closest custom silicon peer, and NVIDIA (NASDAQ:NVDA) is the default AI reflex trade. I own neither in the size I own Marvell. A forward P/E of 58 against a fiscal 2028 custom business expected to more than double year over year and a custom revenue target of over $10 billion in fiscal 2029 is math I am happy to keep funding. Marvell’s numbers describe that ramp more directly than either alternative.
Risk I Am Not Waving Away
Q1 FY2027 net income came in at $34.5 million, down 80.61% YoY, driven by a $331.8 million contingent consideration fair-value charge and stock-based compensation rising to $207.6 million from $142.1 million. Integrating Celestial AI and XConn carries execution risk that will take quarters to work through. The stock carries a beta of 2.246 and a 52-week range from $61.31 to $329.80, so I size for volatility. Operating cash flow still printed a record $638.8 million, up 91.89%, and the design win pipeline funding fiscal 2028 was “already won and locked” before the quarter started.
What Keeps the Buy Button Active
Marvell told the market revenue growth will accelerate each quarter of fiscal 2027, custom will more than double in fiscal 2028, and the fiscal 2029 target sits above $10 billion in custom alone. As long as those receipts keep landing on schedule, my orders keep landing with them.
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