Forget AI Models. This Company Sells What Every AI Giant Needs.

Marvell Technology (MRVL) may not be building the AI models. However, its growing influence has piqued not only the market’s attention but even Nvidia’s (NVDA) CEO Jensen Huang, who called it a potential “next trillion-dollar company.” Marvell supplies the infrastructure, mainly networking, optical connectivity, switching, and custom silicon, without which AI models won't function efficiently.

Huang specifically highlighted Marvell's role in enabling connectivity across AI systems, calling the company "essential" to the next phase of AI growth. MRVL stock skyrocketed on Huang’s comments, climbing 225% year-to-date (YTD), outperforming even Nvidia and the S&P 500 ($SPX). The company has also earned a spot in the S&P 500, a milestone that reflects its growing importance in the semiconductor industry.

Should you grab MRVL stock now, or is it too late?

A Deeper Partnership With Nvidia Expands the AI Opportunity

Huang’s remarks came as Nvidia and Marvell deepened their partnership around AI infrastructure. This partnership spans three areas, particularly silicon photonics, NVLink Fusion integration, and AI-RAN infrastructure. Through NVLink Fusion, Marvell plans to build custom chips and networking semiconductors that integrate directly with Nvidia's ecosystem. Marvell's AI-RAN program involves the integration of its OCTEON platform with Nvidia GPUs. This enables telecommunications carriers to execute both wireless network workloads and AI applications on the same hardware platform.

Marvell is expanding its opportunities with many other partnerships and acquisitions. For instance, It plans to acquire Polariton, a developer of high-speed plasmonic-based silicon photonics technology, since Marvell’s CEO Matthew J. Murphy believes optics are the future of data center connectivity. Additionally, the acquisition of Celestial AI and its existing silicon photonics capabilities will boost Marvell’s opportunities in scale-up optics. Marvell expects its scale-up optics business to be worth $150 million by next year.

Networking Is Becoming the Heart of AI Infrastructure

Marvell has built a broad portfolio of networking and connectivity products. Management believes its networking or interconnect business could become its biggest growth driver. Marvell excels at scale-out, scale-up, and scale-across networking, all of which are required for massive AI systems. Hence, interconnect revenue is expected to grow more than 70% year-over-year (YoY) in fiscal 2027, driven by rising demand for 800-gig products, while the newer 1.6-terabit solutions ramp up.

Agentic AI, which requires several AI agents to interact with one another, might be a significant driver of future demand for Marvell's products. Advanced AI applications require greater network traffic and memory. This will increase demand for network interface cards, PCIe switches, retimers, and high-speed networking solutions. While networking is in the spotlight, Marvell's custom silicon business is also gaining traction. Customs revenue is predicted to increase by more than 20% in fiscal 2027, before more than doubling in fiscal 2028. The company's ambitious long-term aim is to create over $10 billion in custom business revenue by fiscal year 2029.

Total revenue climbed 28% YoY in Q1 of fiscal 2027 to $2.4 billion. Adjusted earnings per share reached $0.80, fueled by growth across its entire data center portfolio. Data center revenue reached $1.8 billion, up 27% YoY, and accounted for 76% of total revenue. Management predicts the segment to grow 70% YoY in fiscal 2027, followed by 55% in fiscal 2028. Marvell raised its fiscal 2027 revenue guidance to $11.5 billion, which would be a potential 40% annual growth. Furthermore, fiscal 2028 revenue could be around $16.5 billion. Marvell clarified that these ambitious projections are not based on speculative demand but on customer commitments and programs already in the works.

Analysts expect Marvell’s earnings to increase by 42% in fiscal 2027, followed by 52.5% in fiscal 2028, highlighting the strength of Marvell’s AI-driven growth trajectory. This optimism has pushed the stock to a lofty valuation of 65x forward earnings. Although the stock remains pricey, investors who believe Marvell is built for a massive multi-year run might want to include the stock in their long-term portfolio. 

Marvell Is Selling the Infrastructure Behind the AI Boom

All in all, Marvell provides all the infrastructure for the entire AI ecosystem. AI models cannot operate without optical networking, Ethernet switching, DCI connectivity, scale-up networking, custom silicon, memory attachment, retimers, and numerous other technologies that enable AI systems to function at scale.

Inclusion in the S&P 500 index on June 22 is just further proof of its rapid growth, improving profitability, and expanding role in powering AI infrastructure. This move will also improve visibility, allowing billions of dollars from index funds and ETFs to automatically flow into the stock. It marks Marvell’s transformation into one of the semiconductor industry's key growth stories.

This is most likely why MRVL stock has earned a consensus “Strong Buy” rating on Wall Street. Out of the 36 analysts covering shares, 27 have a “Strong Buy,” three have a “Moderate Buy” recommendation, and six suggest a “Hold” rating. MRVL stock has surpassed its average price target of $227.79. However, the high target price of $321 implies a potential upside of 7% from current levels.