Jensen Huang Praises Marvell Technology — Can Optical Stocks Continue Their Strong Run?
Why Marvell Just Became Wall Street's New AI Infrastructure Bet
$Marvell Technology (MRVL.US)$ just became one of the hottest AI infrastructure trades on Wall Street.
The direct catalyst was simple. During Computex week in Taipei, $NVIDIA (NVDA.US)$ CEO Jensen Huang appeared with $Marvell Technology (MRVL.US)$ CEO Matt Murphy and called Marvell the next "trillion-dollar company."
The move also came as investors were already hunting for the next layer of AI beneficiaries beyond GPUs. $Microsoft (MSFT.US)$ 's Maia 200 update added fuel to the broader custom AI chip narrative. Marvell has not publicly confirmed involvement in Maia 200, but the product still matters for the stock because it shows hyperscalers are pushing deeper into custom silicon.
There is also a smaller technical angle. Some investors continue to view Marvell as a potential $S&P 500 Index (.SPX.US)$ inclusion candidate given its size and profitability profile. That remains speculation, not a confirmed catalyst. Index inclusion decisions are made by committee, and timing is impossible to underwrite.
XPU attach is the hidden driver
Marvell's custom silicon story is often simplified into "custom AI chips," but the more durable driver may be XPU attach. XPU attach refers to the chips that sit around the main AI accelerator: NICs, CXL memory attach, PCIe switches, retimers, high-speed I/O and related connectivity silicon.
This matters because Marvell does not need to win every main accelerator to benefit from the custom AI chip cycle. Even when a hyperscaler owns the main XPU design, Marvell can still monetize the surrounding connectivity and memory architecture.
Management said custom revenue remains on track to grow more than 20% in FY2027 and more than double in FY2028. That FY2028 growth is expected to come from three buckets: existing custom programs, more than 10 XPU attach programs reaching higher production volumes, and a new Tier 1 XPU program moving into volume production.
Optical interconnects are the future engine
The future driver is optical interconnects. This is where Marvell's story has changed the most.
Management now expects FY2027 interconnect revenue to grow more than 70%, well above the prior 50% expectation. The company also expects data center revenue to grow about 50% in FY2027 and about 55% in FY2028.
The optical ramp has several layers. DCI modules generated about $500 million in FY2026 and now have line of sight to a $1 billion annualized revenue run-rate in FY2028. Scale-up optics is expected to become meaningful in FY2028, with revenue now expected to be above $300 million, more than double the prior roughly $150 million outlook that was based only on Celestial AI.
That is why investors are no longer treating Marvell as only a custom AI chip story. Optical interconnects, silicon photonics and scale-up networking could become a second growth engine over the next two years.
The valuation risk is now real
The risk is that the stock has moved much faster than near-term earnings.
Marvell expects FY2027 revenue to approach $11.5 billion, up about 40%. It expects FY2028 revenue to reach about $16.5 billion, up about 45%. Management also says custom revenue can exceed $10 billion in FY2029.
The problem is that investors are now paying for a lot of that future growth today. If custom ramps slip, if optical revenue is delayed, if XPU attach programs take longer to scale, or if gross margin fails to improve as revenue grows, the stock could quickly move from "next trillion-dollar candidate" to "priced too far ahead."
Summary
Marvell's rally makes sense. Jensen Huang gave the stock a rare AI endorsement. Maia 200 reinforced the custom silicon theme. XPU attach and optical interconnects give Marvell two powerful earnings drivers beyond the headline custom AI chip narrative.
But the easy money may already have been made. Marvell is now priced like a major AI infrastructure winner, not a cheap catch-up trade. From here, the next leg depends on execution: FY2027 acceleration, FY2028 optical ramp, FY2029 custom silicon targets and margin leverage all need to show up in the numbers.
Check out moomoo's past insights on MRVL:
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