Marvell Technology's Data Center Business Surges to $1.52 Billion on AI Demand December 24, 2025 Marvell Technology Group Ltd. has reported a significant surge in its data center revenues, driven by the relentless expansion of artificial intelligence infrastructure. The company's latest financial results underscore its strategic positioning to capitalize on the massive investments flowing into AI hardware, a critical battleground for semiconductor firms. In its fiscal third quarter of 2026, Marvell's data center segment revenue reached $1.52 billion, marking a substantial 38% increase year-over-year. This segment now constitutes approximately 73% of the company's total revenue, solidifying its role as the primary growth engine. The surge is primarily fueled by large cloud customers ramping up their AI server deployments, which in turn drives demand for high-speed, reliable networking components. Management highlighted that revenues from its optical interconnect products, including digital signal processors and transimpedance amplifiers, grew at a double-digit rate sequentially, indicating robust market demand. Beyond interconnects, the company is seeing solid traction in its data center switching business, with strong demand for its 12.8T switches and the commencement of shipments for newer 51.2T models. Consequently, Marvell now anticipates its data center switch revenues will surpass $500 million in fiscal 2027. Another key growth pillar is the custom compute silicon, or XPU, business. The company has already secured purchase orders covering its full fiscal-year forecast for a major next-generation program with a large customer. While quarterly revenues in this area may fluctuate, Marvell projects at least 20% growth for the custom silicon business in fiscal 2027. Looking ahead, the company expects overall data center revenue to grow more than 25% in the same period, supported by sustained AI investments and increased product adoption within AI systems. The company's performance places it in a competitive landscape alongside giants like Broadcom and NVIDIA. Broadcom has reported its own AI-related revenue surge, reaching $20 billion in fiscal 2025, while NVIDIA continues to dominate the core AI accelerator market with $51 billion in data center revenue last quarter. Marvell's broader product portfolio across networking, switching, and custom silicon aims to capture a significant portion of the peripheral spending necessitated by these AI clusters. From a financial perspective, the Zacks Consensus Estimate projects Marvell's fiscal 2026 and 2027 revenues to increase 41.9% and 22.4% year-over-year, respectively. Earnings for the same periods are expected to grow 80.9% and 26.1%. The company's shares have gained 16.6% over the past six months, and it currently trades at a forward price-to-sales ratio of 7.33x. Source: Nasdaq
Marvell Technology's Data Center Business Surges to $1.52 Billion on AI Demand
