Marvell forecasted strong FY2028 revenue growth driven by AI datacenter demand.

Marvell Technology delivered strong fiscal 2028 revenue guidance above Wall Street estimates on Thursday, forecasting growth of nearly 40% to approach $15 billion compared with analysts' average estimate of $12.92 billion. The announcement, driven by robust demand for custom application-specific integrated circuits and interconnect solutions used in artificial intelligence data centers, sent the company's shares surging 15% in extended trading. The surge reflects broader market strength, as Big Tech firms including Alphabet, Microsoft, Amazon and Meta are expected to spend at least $630 billion to build AI infrastructure this year, lifting demand for chips and networking equipment from companies such as Marvell.

Marvell 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. For the first quarter, the company expects revenue of around $2.40 billion, plus or minus 5%, above estimates of $2.27 billion, with the quarterly forecast including expected results of Celestial AI and XConn Technologies. The company's fourth-quarter results demonstrated momentum, with revenue rising 22% to $2.22 billion, slightly above estimates of $2.21 billion, while adjusted earnings per share of 80 cents beat estimates of 79 cents.

Marvell's data center segment, its largest business, achieved revenue growth of 21% to $1.65 billion in the quarter. The company has reinforced its position through strategic acquisitions, completing its $3.25 billion acquisition of Celestial AI to double down on photonic fabrics, a technology that uses light rather than electrical signals to connect AI chips and memory chips. CEO Matt Murphy stated: "We expect year-over-year revenue growth to accelerate each quarter in fiscal 2027, driven by continued strength in our data center business, with bookings continuing to grow at a record pace."

Marvell and rival Broadcom help cloud-computing companies design custom chips tailored to their data-center workloads, a fast-growing business as hyperscalers seek alternatives to Nvidia's general-purpose AI processors. Broadcom reported expectations of over $100 billion in AI chip sales next year, signaling rapid share gains in a market dominated by Nvidia. According to Kinngai Chan, senior research analyst at Summit Insights: "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."