MRVL's Data Center Revenues Hit $1.5B: Can the Momentum Continue?

Marvell Technology MRVL posted strong results in the third quarter of fiscal 2026, which was led by its data center business. Revenues from the data center business reached $1.52 billion, up 38% from a year ago. This segment made up about 73% of total revenues, showing that data centers are now becoming the main growth engine for the company.The main growth driver for the data center business is rapidly rising artificial intelligence (AI) spending by large cloud customers. As these customers add more AI servers, they need faster and more reliable networking. This is helping demand for Marvell Technology’s interconnect products, such as optical digital signal processors, drivers and Transimpedance Amplifiers. Management said revenues from optical interconnect products grew at a double-digit rate from the previous quarter, pointing to healthy demand.Marvell Technology is also seeing solid growth in its data center switching and storage business. Demand for 12.8T switches remains strong, and the company has started shipping newer 51.2T switches. As a result, Marvell Technology now expects data center switch revenues to exceed $500 million in fiscal 2027.The custom silicon business is another key growth area. Marvell Technology already has purchase orders covering the full fiscal-year forecast for a major next-generation XPU program at a large customer. While custom revenues can move up and down each quarter, Marvell technology expects this business to grow at least 20% in fiscal 2027.Looking ahead, Marvell Technology expects data center revenues to grow more than 25% in fiscal 2027. This outlook is supported by continued AI investments, higher product use inside AI systems and strong customer demand. Overall, MRVL’s wide data center product lineup puts it in a good position to benefit if AI infrastructure spending continues. The Zacks Consensus Estimate for MRVL's fiscal 2026 and 2027 revenues suggests a year-over-year increase of 41.9% and 22.4%, respectively.How Competitors Fare Against MRVLMarvell Technology competes with Broadcom AVGO and NVIDIA NVDA in the data center market.Broadcom benefits from AI through its networking chips and custom silicon used by large cloud customers. AVGO’s AI revenues grew 65% year over year to $20 billion in fiscal 2025 and 74% year over year in the fourth quarter of fiscal 2025. Furthermore, Broadcom expects its AI revenues to double year over year in the first quarter of fiscal 2026 to around $8.2 billion.NVIDIA sits at the center of AI data centers with its graphics processing units (GPUs), which power most AI workloads today. The company reported $51 billion in data center revenues in the third quarter of fiscal 2026, up 66% year over year. NVIDIA also benefits indirectly from higher spending on networking and connectivity around AI clusters, which raises demand for GPUs.MRVL's Price Performance, Valuation and EstimatesShares of Marvell Technology have gained 16.6% in the past six months compared with the Zacks Electronics - Semiconductors industry’s growth of 25.8%.MRVL 6-Month Performance ChartImage Source: Zacks Investment ResearchFrom a valuation standpoint, Marvell Technology trades at a forward price-to-sales ratio of 7.33X, higher than the industry’s average of 6.42X.MRVL Forward 12-Month (P/S) Valuation ChartImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for MRVL’s fiscal 2026 and 2027 earnings implies year-over-year growth of 80.9% and 26.1%, respectively. The estimates for fiscal 2026 have been revised upward by a penny over the past 30 days, while the estimates for fiscal 2027 have been revised upward by a cent over the past seven days.Image Source: Zacks Investment ResearchMarvell Technology currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks