Marvell Technology reported second-quarter fiscal 2027 results that topped analyst expectations, driven by robust demand in data center products tied to artificial intelligence infrastructure. Non-GAAP earnings per share reached $0.94, exceeding the $0.93 estimate, while revenue totaled $2.74 billion against a $2.71 billion consensus. Data center revenue, now 76% of total sales, grew 27% year-over-year to $1.83 billion.
Gross margin remained steady at 58.9%, with operating margin at 35%. Operating cash flow hit a record $639 million. The company also raised its third-quarter fiscal 2027 revenue guidance to $3.15 billion, above the $3.04 billion consensus, and scheduled its next earnings release for November 26, 2026.
Marvell’s outlook reflects accelerating AI adoption across hyperscale data centers. Management highlighted a $120 billion custom AI product agreement with Google spanning storage controllers, network interface cards, and AI inference accelerators through 2033. Custom silicon revenue is projected to more than double to roughly $4 billion by fiscal 2028, with a $10 billion target set for fiscal 2029. The company’s pipeline includes over 50 opportunities with a potential lifetime value of $75 billion.
Optical interconnect initiatives are advancing, with shipments of 800G PAM4 DSPs underway and 200G-per-lane 1.6T solutions slated for the second half of fiscal 2026. Data center interconnect revenue is targeted to reach $1 billion annually by fiscal 2028, supported by the Polariton acquisition, which adds silicon photonics technology featuring modulators exceeding 1 terahertz bandwidth. The broader optical total addressable market is projected to expand 70% year-over-year by 2027.
Despite the upbeat performance, Marvell’s shares fell 8.2% to $221.63 in after-hours trading, trimming its market capitalization to $194.4 billion. The decline followed a day after NVIDIA’s earnings set a higher bar for AI chip suppliers. Analyst Cody Acree of Benchmark noted that Marvell’s guidance increase was "insufficient given the stock's recent performance," particularly in light of NVIDIA’s strong results.
Cantor Fitzgerald maintained a Neutral rating with a $300 price target, acknowledging Marvell’s elevated valuation—trading at 29 times calendar 2028 earnings—but citing the pullback as a potential inflection point. The firm flagged an upcoming analyst event as a near-term catalyst. Marvell’s stock had surged 187% over the prior year before the report, with a year-to-date gain of 155.5% prior to the drop.
