4 Key Takeaways From Marvell’s AI Event

Key Takeaways

Marvell Technology held an artificial intelligence (AI) event on Thursday offering investors a look into the company’s position and efforts to gain amid the AI boom.
The company announced a new hyperscale customer, meaning three out of the four AI hyperscalers—a category which includes Microsoft, Meta, Amazon, and Alphabet’s Google—use Marvell tech.
AI is expected to account for 30% of Marvell’s total revenue in 2025, triple what it was the year prior, the company said.
Marvell reported that the company is working to double its share of the total addressable market as the market itself grows, driven largely by its custom AI chips.
The company said it would maintain its optics leadership and highlighted that it is one of few companies successfully scaling silicon photonics.

Marvell Technology (MRVL) hosted its artificial intelligence (AI) event Accelerated Infrastructure for the AI Era on Thursday offering investors a look into the company’s position and efforts to gain amid the AI boom.

The company announced a new AI hyperscale customer, projected 30% of 2025 revenue to be related to AI, set a goal to gain market share as the market grows driven by its custom AI chips, and outlined Marvell’s prime position as an optics leader.

New Hyperscale Customer Means 3 Out of 4 AI Hyperscalers Use Marvell Tech

Marvell CEO Matt Murphy announced that the company secured its third AI hyperscale customer and is designing an AI accelerator expected to go into production in 2026.

The company, which makes silicon tech optimized to run AI and cloud workloads as well as custom AI accelerators and similar equipment, serves three of the four AI hyperscalers, Microsoft (MSFT), Meta (META), Amazon (AMZN), and Alphabet’s (GOOGL) Google.

Marvell does not name its customers, though JPMorgan analysts believe Amazon and Google are the company’s first two hyperscale customers.

The company offered some general details about its ongoing projects with the unnamed hyperscalers. The first customer is using Marvell chips for its AI clusters and systems as the companies work together to develop a new custom AI interfacing accelerator. Marvell is designing an Arm (ARM) computer processing unit (CPU) for its second hyperscale customer to deploy in its cloud platform and its AI infrastructure.

Murphy noted that Marvell’s relationship with AI hyperscalers gives the company a “significant advantage over [its] competition.”

AI To Drive 30% of Marvell’s Revenue in 2025

Marvell reported that the company expects the portion of total revenue related to AI to triple in the next year, a pattern consistent with growth in recent years.

The tech company projects AI revenue will be more than $1.5 billion, or 30% of its total revenue in the 2025 fiscal year, triple the AI share seen the year prior. The 2025 AI-related revenue is expected to be around two-thirds conductivity and another third being custom computing.

Marvell recorded more than $550 million in AI-related revenue in the 2024 fiscal year, accounting for around 10% of total revenue, triple the around $200 million in 2023 that represented 3% of all revenue. The company expects growth to continue into 2026 with AI-related revenue jumping to over $2.5 billion.

Marvell Aims to Gain Market Share as Market Grows, Driven by Custom AI Chips

Company leaders said they expect Marvell to capture a greater share of the semiconductor market as it grows amid the AI boom, with a boost from its accelerated custom computing segment.

Murphy broke down the data center semiconductor market into components relevant to Marvell, including accelerated custom compute, switching, interconnect and storage segments, reporting that the total addressable market (TAM) represented $21 billion in the 2023 calendar year. He noted that the company generated around $2.2 billion in revenue in that period, capturing 10% of the TAM.

The company said it aims to increase that share to 20% from 10% in the long term, as the market expands to $75 billion by 2028 from $21 billion in 2023. Marvell needs to maintain its leadership position in interconnect and storage while growing its share of the accelerated custom compute and switching subsegments to reach this target, Murphy said.

The custom chip market is currently dominated by Broadcom (AVGO) with Bank of America analysts estimating the company holds around 75% of the market. Ahead of the event, the analysts had noted that they expect Marvell to “become more relevant” in the custom chip market.

“Gaining share in custom compute will be the biggest part of getting Marvel to the 20% overall market share,” Marvell President of Products and Technologies Raghib Hussain said.

Marvell Among Few Reliably Scaling Silicon Photonics, $3B Emerging Market

Marvell executives told investors that the company is well positioned to maintain its leadership in optics and is among the few companies to successfully scale silicon photonics.

When asked how Marvell will balance integrating itself as customers develop their own optics products, Executive Vice President and General Manager of the Marvell Cloud Optics Business Loi Nguyen said “a lot of people say they have silicon photonics, but few companies actually have successfully commercialized shipping silicon photonics at scale like Marvell.”

Murphy noted that as a component vendor, Marvell could be well positioned to gain from the “brand new emerging $3 billion market.”

Marvell shares were little changed at $71.29 as of about 3:20 p.m. ET Thursday. The stock has gained more than 22% year-to-date.

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