MRVL's Q2 Earnings Likely to be Powered by AI Silicon & Data Center Boom

Marvell Technology, Inc. MRVL is set to report its second-quarter fiscal 2026 results on Aug. 28, and investors are laser-focused on the growing traction in its AI-driven data center business.Marvell Technology has witnessed steady adoption of its custom AI silicon and electro-optics solutions in the past few quarters, strengthening its presence in the AI infrastructure market. With data center revenues now taking a lion’s share of its total sales, MRVL is expected to witness robust growth in this new-age business.Click here to know how Marvell Technology’s overall fiscal second-quarter results are likely to be.Momentum in Data Center Business to Drive MRVLMarvell Technology’s data center segment is thrusting its growth, propelled by the growing adoption of AI computation across both hyperscale and enterprise spaces. In the last quarter, the data center business reported record revenues of $1.44 billion, marking 76.5% year-over-year growth. The robust revenue growth in the data center segment was driven by the growing demand for custom AI silicon, high-performance networking chips and electro-optics solutions.Marvell Technology, Inc. Price and EPS Surprise Marvell Technology, Inc. price-eps-surprise | Marvell Technology, Inc. QuoteFor the second quarter, Marvell Technology’s data center revenue growth is likely to have been backed by robust traction across its offerings and supply-chain efficiency. The company’s partnership with cloud computing leaders, including Amazon Web Services (“AWS”), through multi-year agreements reinforces its leadership in delivering AI-optimized silicon solutions. Our model estimates that second-quarter data center revenues will reach $1.5 billion, implying a robust 70.4% year-over-year growth.MRVL’s Custom AI Silicon Underpins Its ExpansionMarvell Technology is experiencing strong traction for its AI semiconductor offering on the back of its custom AI silicon programs. The company has expanded its 100-billion-transistor AI accelerators, providing early silicon success to customers. These advanced custom chips have allowed Marvell Technology to forge deeper collaborations with hyperscale players seeking the optimized AI workloads with custom solutions.MRVL’s ability to design and manufacture high-performance, power-efficient AI processors gives it a competitive edge in the rapidly growing AI data center market, enabling it to expand its pipeline across multiple customers. The growing demand for custom AI silicon is anticipated to have driven the data center revenues in the second quarter.Electro-Optics & Networking to Boost Growth For MRVLApart from custom silicon, Marvell Technology’s electro-optics and high-speed networking segments are also likely to have contributed significantly to the second-quarter revenues. The company’s 800-gig PAM and 400ZR interconnect solutions have seen strong order momentum, helping hyperscalers manage the exponential growth in AI-generated data traffic.Marvell Technology has been shipping industry-leading 1.6T PAM DSP technology, which enhances bandwidth efficiency and energy savings for next-generation data center interconnects. Its DSPs for 1.6T optics that reduce power consumption by 20% give it a strong reason for adoption among its customers in the to-be-reported quarter.Key Segmental Headwinds For Marvell TechnologyMarvell Technology’s industrial and consumer segments have been experiencing lumpy order patterns. Its Industrial segment is likely to have suffered a decline offsetting the growth in automotive business. Additionally, the macro environment continues to suppress demand for industrial applications. Moreover, although its Custom AI silicon programs are growing fast, they carry lower gross margins.Considering all these factors, the Zacks Consensus Estimate for MRVL’s fiscal second-quarter revenues has been pegged at $2.01 billion, indicating a year-over-year rise of 58%. The consensus estimate for second-quarter earnings has been set at 67 cents per share, indicating year-over-year growth of 123.3%.MRVL’s Rank and Stocks to ConsiderCurrently, Marvell Technology stock carries a Zacks Rank #3 (Hold). Here are a few companies worth considering, as our model indicates that they possess the right combination of factors to exceed earnings expectations in their upcoming releases:BuildABear Workshop BBW currently has an Earnings ESP of +11.00% and a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.BuildABear Workshop shares have jumped 19.5% year to date. BuildABear Workshop is slated to report its second-quarter 2025 results on Aug. 28.Abercrombie & Fitch ANF has an Earnings ESP of +2.62% and a Zacks Rank of 3 at present.Abercrombie & Fitch shares have declined 38.5% year to date. Abercrombie & Fitch is slated to report its second-quarter fiscal 2026 results on Aug. 27.Bath & Body Works BBWI currently has an Earnings ESP of +3.17% and a Zacks Rank of 3.Bath & Body Works shares have declined 23.6% in the year-to-date period. Bath & Body Works is scheduled to report its second-quarter fiscal 2026 results on Aug. 28.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>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 Abercrombie & Fitch Company (ANF): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report Build-A-Bear Workshop, Inc. (BBW): Free Stock Analysis Report Bath & Body Works, Inc. (BBWI): 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