Broadcom’s AI Bonanza Has Limits
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 08 2025
0mins
Should l Buy MRVL?
Source: WSJ
Broadcom's Financial Success: Broadcom is profiting significantly by aiding tech companies in manufacturing custom chips for artificial intelligence, leading to a remarkable stock increase of over 70% in two months.
Market Valuation Milestone: The company's stock surge has propelled its valuation past $1 trillion, making it the seventh-most-valuable publicly traded U.S. company, surpassing major firms like Walmart and Tesla.
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Analyst Views on MRVL
Wall Street analysts forecast MRVL stock price to rise
30 Analyst Rating
22 Buy
8 Hold
0 Sell
Moderate Buy
Current: 81.340
Low
85.00
Averages
120.12
High
156.00
Current: 81.340
Low
85.00
Averages
120.12
High
156.00
About MRVL
Marvell Technology, Inc., together with its subsidiaries, is a supplier of data infrastructure semiconductor solutions, spanning the data center core to network edge. The Company is engaged in the design, development, and sale of integrated circuits. Its product solutions serve various end markets: data center, enterprise networking, carrier infrastructure, consumer, and industrial. Its product offerings include CXL, Data Processing Units, Security Solutions, Coherent DSPs, Coherent-lite DSPs, Data Center Switches, DCI Optical Modules, Enterprise Switches, Ethernet Controllers, Ethernet PHYs, PCIe Retimers, Linear Drivers, PAM DSPs, Transimpedance Amplifiers, Fiber Channel, HDD, Storage Accelerators, and SSD Controllers. The Company develops semiconductor solutions tailored to individual customer specifications that deliver system-level differentiation for artificial intelligence, data center, compute, networking, carrier, storage, aerospace, and defense applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
MARVELL FINALIZES PURCHASE OF XCONN TECHNOLOGIES
Acquisition Announcement: Marvel has completed the acquisition of Xconn Technologies, enhancing its technological capabilities.
Strategic Importance: This acquisition is expected to bolster Marvel's position in the tech industry and improve its product offerings.
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Marvell Technology's Positive Outlook Amid AI Chip Demand
- Market Opportunity: Marvell Technology anticipates a 20% growth in its custom chip business by fiscal 2027, indicating strong demand in the AI chip market and potential revenue growth, particularly as Microsoft plans to ramp up its use of the Maia chip over the next two years.
- Data Center Revenue Growth: Overall data center revenue is expected to grow by 25% next year, which will drive sales of Marvell's networking chips, especially as the demand for data processing increases with large language models, further solidifying its market position.
- Acquisition Enhances Competitiveness: Marvell's recent acquisition of Celestial AI, which specializes in optical connectivity, is expected to generate $500 million in revenue by the end of fiscal 2028 and double by 2029, demonstrating the company's strategic focus on improving AI accelerator efficiency.
- Attractive Valuation: Despite competitive pressures, Marvell's stock price has fallen to $74, with a forward P/E ratio of 21, making it an attractive investment opportunity in the AI semiconductor space, especially for small investors compared to Broadcom's 31 times P/E ratio.
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Direxion Launches Four New Leveraged ETFs
- New Product Launch: Direxion is launching four new single-stock leveraged ETFs on Wednesday, aimed at providing traders with amplified exposure to the semiconductor, e-commerce, and digital finance sectors, with an expected performance of twice the underlying stock's daily returns.
- Short-Term Trading Tools: These ETFs are designed for short-term tactical trading rather than long-term investing, reflecting Direxion's keen insight into market volatility and helping investors seize rapidly changing market opportunities.
- Digital Economy Leaders: The selected companies, including ASML, Marvell, Alibaba, and SoFi, are at the core of the digital economy, allowing investors to leverage these ETFs for precise trading of short-term bullish views related to semiconductor technology, e-commerce, and fintech.
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Marvell Completes Acquisition of XConn Technologies
- Acquisition Completed: Marvell Technology, Inc. has announced the completion of its acquisition of XConn Technologies, which will enhance its capabilities in PCIe and CXL switching products, thereby strengthening its competitive position in AI and cloud data center architectures.
- Expected Financial Impact: XConn is anticipated to begin contributing revenue in Q3 of fiscal 2027, with an expected annualized run rate of $50 million by Q4 of fiscal 2027, and a projected contribution of $100 million in fiscal 2028, indicating significant long-term revenue potential from the acquisition.
- Increased Operating Costs: The acquisition is expected to add approximately $25 million in annual non-GAAP operating expenses to Marvell's current run rate, which may exert short-term pressure on profits but is expected to enhance overall business capabilities in the long run.
- Cash Flow Impact: The completion of the acquisition reduced Marvell's cash balance by $325 million, which is expected to decrease other income by approximately $12 million annually in future fiscal periods, potentially affecting the company's financial flexibility.
See More
Marvell Completes Acquisition of XConn Technologies
- Acquisition Completed: Marvell Technology, Inc. has announced the completion of its acquisition of XConn Technologies, which will enhance its capabilities in PCIe and CXL switching products, thereby strengthening its competitive position in next-generation AI and cloud data center architectures.
- Expected Financial Impact: Marvell anticipates that XConn will begin contributing revenue in the third quarter of fiscal 2027, with an expected annualized run rate of $50 million by the fourth quarter, and a projected contribution of $100 million in fiscal 2028, indicating significant long-term revenue potential from the acquisition.
- Increased Operating Costs: The acquisition is expected to add approximately $25 million in annual non-GAAP operating expenses to Marvell's current run rate, which may impact short-term profits but is expected to drive revenue growth through an enhanced product portfolio in the long run.
- Cash Flow Impact: The completion of the acquisition has reduced Marvell's cash balance by $325 million, leading to an anticipated decrease of approximately $12 million in other income in future fiscal periods, which may exert some pressure on the company's financial condition.
See More
Investment Opportunity Analysis for Marvell Technology Stock
- Growing Market Demand: With the rapid increase in demand for memory components integrated with GPUs, Marvell Technology anticipates a 20% growth in its custom chip business for fiscal 2027, indicating strong growth potential in the AI chip market.
- Stable Customer Base: Despite competition from Broadcom, Marvell maintains partnerships with all four major U.S. hyperscalers, including Microsoft, and expects its product revenue to reach $500 million by fiscal 2028, demonstrating stability in its market position.
- Rising Capital Expenditures: The capital expenditures of Microsoft and other hyperscaler cloud customers are increasing faster than analysts had anticipated, which will provide tailwinds for the entire semiconductor sector and further drive Marvell's sales growth.
- Acquisition Enhances Competitiveness: Marvell's acquisition of Celestial AI has strengthened its optical connectivity chip business, with expectations to double revenue from this product by the end of 2029, showcasing the company's technological advantages and market prospects in the AI accelerator space.
See More
MARVELL FINALIZES PURCHASE OF XCONN TECHNOLOGIES
Acquisition Announcement: Marvel has completed the acquisition of Xconn Technologies, enhancing its technological capabilities.
Strategic Importance: This acquisition is expected to bolster Marvel's position in the tech industry and improve its product offerings.
See More
Marvell Technology's Positive Outlook Amid AI Chip Demand
- Market Opportunity: Marvell Technology anticipates a 20% growth in its custom chip business by fiscal 2027, indicating strong demand in the AI chip market and potential revenue growth, particularly as Microsoft plans to ramp up its use of the Maia chip over the next two years.
- Data Center Revenue Growth: Overall data center revenue is expected to grow by 25% next year, which will drive sales of Marvell's networking chips, especially as the demand for data processing increases with large language models, further solidifying its market position.
- Acquisition Enhances Competitiveness: Marvell's recent acquisition of Celestial AI, which specializes in optical connectivity, is expected to generate $500 million in revenue by the end of fiscal 2028 and double by 2029, demonstrating the company's strategic focus on improving AI accelerator efficiency.
- Attractive Valuation: Despite competitive pressures, Marvell's stock price has fallen to $74, with a forward P/E ratio of 21, making it an attractive investment opportunity in the AI semiconductor space, especially for small investors compared to Broadcom's 31 times P/E ratio.
See More
Direxion Launches Four New Leveraged ETFs
- New Product Launch: Direxion is launching four new single-stock leveraged ETFs on Wednesday, aimed at providing traders with amplified exposure to the semiconductor, e-commerce, and digital finance sectors, with an expected performance of twice the underlying stock's daily returns.
- Short-Term Trading Tools: These ETFs are designed for short-term tactical trading rather than long-term investing, reflecting Direxion's keen insight into market volatility and helping investors seize rapidly changing market opportunities.
- Digital Economy Leaders: The selected companies, including ASML, Marvell, Alibaba, and SoFi, are at the core of the digital economy, allowing investors to leverage these ETFs for precise trading of short-term bullish views related to semiconductor technology, e-commerce, and fintech.
- Product Line Expansion: This launch increases Direxion's total number of single-stock leveraged ETFs to 55, spanning multiple sectors such as technology, energy, aerospace, automotive, online commerce, and cryptocurrency, showcasing its ongoing innovation in packaging high-conviction trades.
See More
Marvell Completes Acquisition of XConn Technologies
- Acquisition Completed: Marvell Technology, Inc. has announced the completion of its acquisition of XConn Technologies, which will enhance its capabilities in PCIe and CXL switching products, thereby strengthening its competitive position in AI and cloud data center architectures.
- Expected Financial Impact: XConn is anticipated to begin contributing revenue in Q3 of fiscal 2027, with an expected annualized run rate of $50 million by Q4 of fiscal 2027, and a projected contribution of $100 million in fiscal 2028, indicating significant long-term revenue potential from the acquisition.
- Increased Operating Costs: The acquisition is expected to add approximately $25 million in annual non-GAAP operating expenses to Marvell's current run rate, which may exert short-term pressure on profits but is expected to enhance overall business capabilities in the long run.
- Cash Flow Impact: The completion of the acquisition reduced Marvell's cash balance by $325 million, which is expected to decrease other income by approximately $12 million annually in future fiscal periods, potentially affecting the company's financial flexibility.
See More
Marvell Completes Acquisition of XConn Technologies
- Acquisition Completed: Marvell Technology, Inc. has announced the completion of its acquisition of XConn Technologies, which will enhance its capabilities in PCIe and CXL switching products, thereby strengthening its competitive position in next-generation AI and cloud data center architectures.
- Expected Financial Impact: Marvell anticipates that XConn will begin contributing revenue in the third quarter of fiscal 2027, with an expected annualized run rate of $50 million by the fourth quarter, and a projected contribution of $100 million in fiscal 2028, indicating significant long-term revenue potential from the acquisition.
- Increased Operating Costs: The acquisition is expected to add approximately $25 million in annual non-GAAP operating expenses to Marvell's current run rate, which may impact short-term profits but is expected to drive revenue growth through an enhanced product portfolio in the long run.
- Cash Flow Impact: The completion of the acquisition has reduced Marvell's cash balance by $325 million, leading to an anticipated decrease of approximately $12 million in other income in future fiscal periods, which may exert some pressure on the company's financial condition.
See More
Investment Opportunity Analysis for Marvell Technology Stock
- Growing Market Demand: With the rapid increase in demand for memory components integrated with GPUs, Marvell Technology anticipates a 20% growth in its custom chip business for fiscal 2027, indicating strong growth potential in the AI chip market.
- Stable Customer Base: Despite competition from Broadcom, Marvell maintains partnerships with all four major U.S. hyperscalers, including Microsoft, and expects its product revenue to reach $500 million by fiscal 2028, demonstrating stability in its market position.
- Rising Capital Expenditures: The capital expenditures of Microsoft and other hyperscaler cloud customers are increasing faster than analysts had anticipated, which will provide tailwinds for the entire semiconductor sector and further drive Marvell's sales growth.
- Acquisition Enhances Competitiveness: Marvell's acquisition of Celestial AI has strengthened its optical connectivity chip business, with expectations to double revenue from this product by the end of 2029, showcasing the company's technological advantages and market prospects in the AI accelerator space.
See More
