Marvell projects strong fiscal 2028 revenue on AI-driven data center boom, shares jump
- Revenue outlook for fiscal 2028 surpasses Street estimates
- Company now expects fiscal 2027 revenue growth of over 30%
- Marvell’s data center revenue grows 21% in fourth quarter
- CEO expects accelerating revenue growth in fiscal 2027
- Company expects Q1 revenue to be $2.40 billion, plus or minus 5%
March 5 (Reuters) – Marvell Technology (MRVL.O), forecast fiscal 2028 revenue above Wall Street estimates on Thursday, signaling robust demand for custom chips and interconnect solutions used in artificial intelligence data centers, sending its shares surging 15% in extended trading.
Growing adoption of AI tools has boosted demand for specialized chips such as Marvell’s custom application-specific integrated circuits used in advanced data centers, as well as its interconnect technologies that enable high-speed data transfer between processors, memory and servers.
Big Tech firms including Alphabet (GOOGL.O), Microsoft (MSFT.O), Amazon (AMZN.O), and Meta (META.O), are expected to spend at least $630 billion to build AI infrastructure this year, lifting demand for chips used in servers and networking equipment from companies such as Marvell.
That spending is flowing to Marvell through its data center business, President and Chief Operating Officer Chris Koopmans said in an interview.
He said,
They’re still growing massively,
Marvell expects revenue to grow nearly 40% and approach $15 billion in fiscal 2028, above analysts’ average estimate of $12.92 billion, according to data compiled by LSEG.
The company also raised its fiscal 2027 revenue forecast to grow more than 30% year over year, nearing $11 billion, compared with its earlier expectations of about $10 billion revenue.
Koopmans said,
We’re sitting here looking at hyperscalers (capital spending) plans for the year, and we’re able to look at our booking rate, and we feel very confident in hitting those numbers,
It expects revenue of around $2.40 billion, plus or minus 5%, for the first quarter, above estimates of $2.27 billion. The company said the quarterly forecast includes expected results of Celestial AI and XConn Technologies.
Marvell divested its automotive ethernet business last year and completed the acquisition of Celestial AI in a deal worth $3.25 billion, doubling down on photonic fabrics, a technology that uses light rather than electrical signals to connect AI chips and memory chips.
Marvell and rival Broadcom (AVGO.O), help cloud-computing companies design custom chips tailored to their data-center workloads, a fast-growing business as hyperscalers seek alternatives to Nvidia’s (NVDA.O), eneral-purpose AI processors.
The custom chip business amounts to roughly 10% to 15% of the company’s revenue and the company expects that to continue to grow, Koopmans said.
Kinngai Chan, senior research analyst at Summit Insights, said:
Marvell’s shares like many AI-related names have underperformed the semiconductor group in the past two quarters.
”We think the better-than-expected results and outlook, while expected, is more of a relief for investors than confirming the near-term data center spending strength,”
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Marvell projects strong fiscal 2028 revenue on AI-driven data center boom, shares jump, source
