Marvell raised its long-term outlook as hyperscalers ramp up spending on custom AI chips and next-generation data centres.
Marvell Technology has projected that revenue from its custom AI chip business will exceed $10 billion in fiscal 2029, highlighting the growing demand for specialised semiconductor solutions as cloud companies rapidly expand their AI infrastructure.
The company said rising investments in AI data centres are driving demand for custom-built chips designed to reduce dependence on Nvidia’s processors. Marvell’s semiconductor products, along with its high-speed interconnect technologies, are increasingly being used in advanced data centres that power and train artificial intelligence models.
Investor confidence in the company has surged alongside the broader AI boom, with Marvell’s shares more than doubling this year.
The chipmaker also raised its revenue outlook for fiscal 2028 to around $16.5 billion, compared to its earlier estimate of $15 billion. Analysts viewed the updated guidance positively, with Morningstar noting that the company’s custom chip business alone could add nearly $5 billion in additional revenue between fiscal 2028 and 2029.
For the second quarter, Marvell expects revenue of approximately $2.70 billion, slightly ahead of market expectations of $2.60 billion. Adjusted earnings are forecast at 93 cents per share, above analysts’ estimates of 90 cents.
Marvell and competitor Broadcom have become key partners for major cloud service providers by helping them develop customised chips tailored for specific AI and data centre workloads. CEO Matt Murphy said the company is currently working with all major U.S. hyperscale cloud operators on custom chip projects.
The company has benefited significantly from rising spending by large technology firms on AI infrastructure. Companies such as Alphabet and Amazon are expected to collectively spend more than $700 billion on AI-related infrastructure this year, compared with roughly $400 billion last year.
Marvell also expects its data centre business to expand by about 50% this year. In the first quarter, revenue from the segment reached $1.83 billion, slightly ahead of market estimates.
Overall first-quarter revenue rose 28% year-on-year to $2.42 billion, while adjusted earnings came in at 80 cents per share, both beating analyst expectations.
