I Keep Buying Marvell Technology Because Its Type Historically Wins
Every time the hyperscalers write a check to build out AI, one mid-cap chip company's name keeps appearing on the invoice, and the pattern behind that is exactly why this stock stays in the buy column.
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I keep buying Marvell Technology because every time I look at what the hyperscalers are actually purchasing to build out AI, this company’s name shows up on the invoice. That is the whole thesis in one line, and it is why my finger keeps hitting the buy button.
Marvell Technology (NASDAQ:MRVL | MRVL Price Prediction) sells the custom silicon, optical DSPs, switches, and interconnect chips that turn a warehouse of GPUs into a working AI cluster. This is a classic picks-and-shovels position. During the railroad boom, the steel makers won. During the internet buildout, Cisco got paid on every router that carried the traffic. In the AI buildout, whoever supplies the connectivity between accelerators gets paid on every rack that ships, whichever cloud brand wins the end customer.
Three Reasons the Buy Button Stays Active
First, the mix. Data Center revenue hit $2.17 billion last quarter, growing 46% year-over-year and now accounting for 79% of total revenue. The whole company moves with AI infrastructure spend.
Second, margins are widening while the top line accelerates. Non-GAAP operating margin expanded 180 basis points year-over-year to 36.6%, and management expects it to enter the 38% to 40% long-term target range in the fourth quarter of fiscal 2027. Revenue climbed 37% year-over-year to $2.739 billion. Operating leverage is showing up in the numbers themselves.
Third, guidance keeps going up. Management raised the fiscal 2027 revenue outlook to roughly $12 billion, guided fiscal 2028 revenue growth to approximately 50% year-over-year, and disclosed an expanded commercial agreement with a hyperscaler including a warrant tied to revenue milestones. CEO Matt Murphy called it “a significant validation of where Marvell sits in the market today”. The custom business is expected to more than double year over year in fiscal 2028.
How Marvell Stacks Up Against the Obvious Alternatives
Broadcom (NASDAQ:AVGO) is the crowded AI trade, and I own some, but new money keeps going to Marvell. Broadcom’s market cap sits near $1.75 trillion, roughly nine times Marvell’s $194.7 billion. Its infrastructure software segment grew only 9% year on year last quarter, diluting the AI silicon story. Marvell gives me a cleaner mid-cap vehicle where the custom ramp actually moves the whole ship.
Applied Materials (NASDAQ:AMAT) is the other picks-and-shovels reflex, and it sits one layer further from the hyperscaler purchase order. Revenue grew 25% year over year last quarter, trailing Marvell’s pace. China represents 26% of its systems and services revenue, keeping export-restriction overhang in the picture. Marvell ships directly into the custom accelerator programs.
One Risk Worth Watching Closely
Customer concentration is real. A handful of hyperscalers drive the custom silicon business, and if one decides to design more in-house, revenue can move sharply. Long-term debt sits at $4.96 billion. What keeps me buying is that the expanded warrant deal locks in years of programs across the TPU ecosystem, and Murphy says “this growth remains broad-based” across connectivity, switching, custom silicon, and CXL memory.
Forward P/E sits at 60x, which is a premium, and analysts have lifted fiscal 2028 EPS consensus from $5.4545 ninety days ago to $6.2490 today. When the picks-and-shovels seller gets this kind of demand visibility, the setup historically rewards patient holders who let the ramp play out (we reverse-engineered what the biggest AI-era tech winners looked like early in a free playbook here).
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
