What Changed In Marvell’s Story?
Marvell Technology (MRVL) stock returned 201% in the past year, against 17.7% for the S&P 500. Investors value it as an AI data center chip company at 85.6 times earnings, versus 22.1 for the S&P 500. Investors paying that multiple are counting on data center growth staying fast. Management used to tell a second growth story too, and it no longer leads with that story. So what did Marvell’s management stop leading with?
Marvell Stopped Leading With A Recovery Outside Data Centers
Marvell’s management stopped leading with a recovery in its markets outside the data center. In March 2025, reporting fiscal Q4 2025, management pointed to a continued recovery in demand across those markets. They included carrier, enterprise networking, and automotive and industrial.
That recovery mattered because those markets were still a big part of Marvell. In fiscal Q2 2026, management said data center drove three quarters of total revenue. That left about a quarter for everything else.
Marvell then shrank that group of markets. It sold its auto business, which management said further cut the group’s share of revenue. In fiscal Q3 2026, management folded these markets into one reporting group, called communications and other. It still reports the group’s sales.
Management no longer leads with what has become a smaller part of Marvell. Marvell’s story has changed, and it has narrowed to the data center.
Marvell Now Leads With Data Center Growth
Management now leads with data center growth, and it expects more of it than before. Data center revenue hit a record $2.17 billion in fiscal Q2 2027, up 46% from a year earlier. That was 79% of Marvell’s total revenue.
The markets outside the data center brought in $568 million, up 10% from a year earlier. So they still grow, just far more slowly. Data center sales are now nearly four times as large.
In fiscal Q2 2027, management also raised its outlook. It now expects data center revenue to grow about 60% in fiscal 2027, up from about 50%. That implies faster growth later in the year than the 46% in fiscal Q2, and management expects its custom business, which makes custom AI silicon, to ramp significantly in the second half. It also expects that business to more than double in fiscal 2028. So Marvell expects faster data center growth than a quarter ago, while its quieter markets grow slowly.
Should You Worry About Marvell’s Quieter Markets?
You have little reason to worry about Marvell’s markets outside the data center, on the latest figures. They are about a fifth of revenue, and they still grew from a year earlier in fiscal Q2 2027. Their quieter place in management’s remarks fits their smaller size, not a slump.
You cannot count on those markets to be steady, though. Management expects their revenue to stay somewhat lumpy from quarter to quarter. In fiscal Q2 2027, that revenue fell 3% from the prior quarter.
The bigger issue for you is concentration. With most revenue from data centers, Marvell now depends on one market. If data center growth slows, the smaller markets are too small to make up much of the gap. Marvell stock also falls harder than the market in sell-offs. It fell about 56% in the 2025 US Tariff Shock, against 19% for the S&P 500.
The first read on the outlook comes at Investor Day on October 6, where management plans to give more detail on longer-term growth. The fiscal Q3 2027 report follows. Management guided total revenue of $3.15 billion, plus or minus 5%, about 15% above the $2.74 billion it reported in fiscal Q2.
Marvell’s markets outside the data center are smaller and still growing. So their quieter spot looks like a change in size. The data center outlook is the less certain part, because much of it is still a forecast. Investor Day targets that walk back the custom business more than doubling in fiscal 2028 would weaken that outlook. So would fiscal Q3 2027 revenue below the guided range.
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