Zinger Key Points
- JPMorgan analyst sees Marvell exceeding $2.5B AI target for CY25, driven by AI ASICs and networking products.
- Marvell's AI and optical networking products seeing strong demand, with $2B revenue run-rate expected by CY25.
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JPMorgan analyst Harlan Sur shared key takeaways of a virtual meeting on Monday with Marvell Technology, Inc. MRVL.
The analyst said the company is on track to significantly exceed its previous AI target of $2.5 billion in CY25, driven by strong performance in AI optical/copper networking products and two AI ASIC programs for AWS and Google.
The company is expanding into scale-up networking applications (within-rack connectivity) with solutions like active electrical cables (AEC), co-packaged optics (CPO), and linear pluggable optics (LPO), said the analyst.
Sur noted the Amazon partnership remained strong, with a clear path to multi-generational product wins.
Despite competitive noise around Amazon's 3nm AI compute ASIC program, the company expected no revenue disruption in CY26 and forecasts continued AI ASIC growth in both CY25 and CY26, added the analyst.
The analyst wrote that given the AI accelerator market’s significant growth since April 2024 and the increasing adoption of custom silicon, the company now viewed the $8 billion AI Custom ASICs revenue target for CY28 as conservative.
Sur further said Marvell's optical networking products, including the 800G PAM4 DSP and 1.6T PAM4 DSP, are seeing strong demand, with significant growth expected in DCI products.
The carrier and enterprise networking segments are on track for a $2 billion revenue run-rate, with continued growth through CY25 as shipping aligns with consumption trends, added the analyst.
Yesterday, the company unveiled its custom XPU architecture featuring co-packaged optics technology.
Investors can gain exposure to the stock via Spear Alpha ETF SPRX and Segall Bryant & Hamill Trust Segall Bryant & Hamill Select Equity ETF USSE.
MRVL Price Action: Marvell Technology shares are down 1.89% at $116.76 at publication Tuesday.
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