Shares of Marvell Technology jumped 7.0% to ARS 29,440 on September 22, extending a five-session rally of roughly 17%, after the company unveiled what it called the first working demonstrations of next-generation data-center connectivity chips built on the cutting-edge 2nm manufacturing process. The announcement lands as AI infrastructure spending accelerates and investors hunt for the companies building the pipes — not just the processors — that hold massive AI clusters together.
Being First to 2nm Chips Reinforces a Dominant Market Position. Marvell announced industry-first 2nm optical interconnect demonstrations targeting the next generation of AI data center connectivity. The demos, shown at a major optics conference in Málaga, Spain, include chips capable of pushing data at extreme speeds while using less power — critical as AI data center architectures scale from 1.6 terabits to 3.2 terabits per second and beyond. This matters financially because the competitive landscape has not displaced Marvell from its dominant position — the company holds a 60 to 65% share of the optical DSP market, and being first to the newest manufacturing node extends that lead through multi-year qualification cycles that lock in hyperscaler customers.
Revenue Growth Is Real, but Concentration Risk Is Rising. Data center revenues hit a record $2.17 billion in the most recent quarter, up 46% year over year, and now account for 79% of total revenue.
Marvell forecasts revenue to hit $11 billion in fiscal 2027, representing over 30% growth. Yet that dependence on a few giant cloud buyers — Marvell's biggest custom-chip customer is Amazon — means any single contract shift can move the needle dramatically.
The Valuation Already Prices In a Lot of Good News. MRVL trades at a price-to-sales ratio of 12.77x, well above the semiconductor industry average of 4.75x.
Shares have gained 170% year to date, meaning today's rally is stacking onto an already stretched valuation. The 2nm demo is a technology milestone, not a revenue event — no product ships today.
Broadcom Looms as the Bigger Rival. Broadcom holds around 60% of the custom AI chip market and controls the switch silicon that determines how data centers are wired. Marvell is a pure-play semiconductor firm with revenue almost solely reliant on hardware sales, lacking the high-margin software cushion that protects Broadcom's earnings. Winning the optics race is necessary, but likely not sufficient, to close that gap.