Marvell Stock Jumps After CEO Lifts Two-Year AI Outlook and Credits Trust for the 241% Rally

NEW YORK — Marvell Technology shares rose sharply Wednesday after Chief Executive Matt Murphy told investors the company's two-year sales outlook had jumped by $6.5 billion and that trust with hyperscale customers, not a single product cycle, explains a 241% gain over the past year.

The stock traded at $238.04 around 10:41 a.m. Eastern, up $12.63, or 5.60%. The move extended a rebound from an August selloff that followed earnings and talk of "lumpiness" in custom AI accelerators. Over 12 months Marvell has far outpaced Broadcom, whose shares rose about 6.6% in the same stretch, according to CNBC.

On CNBC's "Mad Money" on Tuesday, Murphy said the December view of about $10 billion in revenue this year and $13.5 billion in 2027 is obsolete. Marvell now expects about $12 billion this year and $18 billion next year — $30 billion across the two years, up from $23.5 billion. Data centers are the engine. The company booked roughly $2 billion of data-center sales in 2023. Murphy said more than $15 billion of next year's $18 billion should come from that market.

"So basically, we've come in a full year and taken the company from $2 billion and change in data center revenue in 2023 to $15-$16 billion next year," he said.

He located the edge in relationships, not slogans. "In this market, these large hyperscale customers and the ecosystem around it, it's really based on trust," Murphy said. "I think trust has been a huge part of it in our brand and our credibility."

That trust has names. Marvell announced a partnership with Nvidia in March that ties custom silicon and optics into the NVLink world. In August it disclosed an expanded commercial agreement and warrant with a major hyperscaler widely identified as Google, covering inference accelerators, storage controllers, network interface cards, memory-interface chips and near-memory compute. Google had long been viewed as Broadcom's flagship custom-silicon account. A $2 billion Nvidia investment in Marvell AI-related work appeared in company filings. Amazon remains a longtime customer even as Qualcomm this week advertised its own Amazon work — a reminder that hyperscalers dual-source and that no socket is permanent.

The numbers behind the interview are recent. On Aug. 27 Marvell reported fiscal second-quarter revenue of $2.74 billion, up 37% from a year earlier, above a $2.71 billion estimate. Adjusted earnings were 94 cents a share, a penny or two above consensus depending on the tape. Operating cash flow was $605.5 million. Data-center revenue rose 46%. Third-quarter guidance was $3.15 billion, plus or minus 5%, and adjusted earnings of $1.10 a share, plus or minus 5 cents — both above Street figures at the time. Management raised the fiscal 2027 sales view to about $12 billion from $11.5 billion and fiscal 2028 to about $18 billion from $16.5 billion.

Custom silicon is the volatile piece. Murphy said on the August call that custom demand is accelerating in the second half and that the business should more than double year over year in fiscal 2028, then speed up again in fiscal 2029. He has also been blunt that custom revenue is lumpy because hyperscalers build in waves. That lumpiness is what knocked the stock in late August even as the quarter beat. Optics and interconnect still carry more of the AI dollar than XPUs in some independent models. Electro-optical parts, not the accelerator die, remain the steadier print.

Marvell is taking that portfolio to the AI Infra Summit this week, showing switches, optics and custom attach silicon as one stack. Celestial AI, bought to push co-packaged optics, is in the same story: management has talked about a $500 million annualized co-packaged-optics run rate in 2028 and $1 billion in 2029.

Competition is the discount rate. Broadcom still owns a large share of custom ASICs. Nvidia owns training. Qualcomm is knocking on Amazon's door. Marvell's pitch is that it will work with all of them — the "Switzerland of AI," as Wednesday's market commentary put it — selling the networking and the second-source accelerator rather than trying to replace the GPU. That only works if Google, Amazon, Meta and Microsoft keep writing multiyear warrants and if the custom ramps do not slip a quarter.

Valuation already assumes they will not slip. The stock trades at a premium to many semiconductor names on next-year earnings. A $238 handle on a company that was a connectivity specialist a few years ago prices in $18 billion of 2028 sales and a data-center mix that would have been science fiction in 2023. An investor day in early October is the next chance for Murphy to put three-year targets under that price.

Wednesday's tape is simpler. The CEO went on television, raised the two-year top line by more than a quarter from the December plan, said data center will be most of the company next year, and attributed a 241% rally to trust. Buyers marked the stock up 5.6% before lunch. The August scare about lumpy XPUs is not gone. It is just quieter than a $15 billion data-center run rate spoken out loud.