Key Stats for Marvell Stock
- Pre-market Price Change for Marvell stock: 10%
- $MRVL Share Price as of Dec. 2: $93
- 52-Week High: $127
- $MRVL Stock Price Target: $92
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What Happened?
Marvell (MRVL) stock is up over 10% in pre-market after the semiconductor company announced it will acquire Celestial AI for at least $3.25 billion in cash and stock. The deal could reach $5.5 billion if the startup hits revenue milestones by the end of fiscal 2029.
The acquisition represents a bold move into optical interconnect technology, which is becoming critical for next-generation AI systems.
Celestial AI’s “photonic fabric” technology enables AI chips to communicate optically rather than via traditional copper wires, enabling faster data transfer over longer distances with greater power efficiency.
Marvell also reported fiscal Q3 results that beat Wall Street expectations. The company reported earnings of $0.76 per share on revenue of $2.07 billion, topping analyst estimates of $0.73 per share on $2.07 billion in revenue. Revenue grew 37% year-over-year, driven by strong demand in the data center business.
Management provided an upbeat outlook for fiscal 2027, expecting data center revenue to grow more than 25% next year. That forecast doesn’t include any contribution from the Celestial AI acquisition and exceeded analyst expectations heading into the earnings call.
CEO Matt Murphy laid out an even more aggressive vision for fiscal 2028, saying he sees a path for data center revenue to accelerate to 40% growth in that year.
He pointed to multiple growth drivers, including the company’s interconnect business, custom chip designs, and expanding into scale-up switching and optical solutions.
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What the Market Is Telling Us About Marvell Stock
The strong reaction to Marvell stock suggests investors view the Celestial AI acquisition as a game-changer rather than an overpayment. The deal addresses a significant technology shift happening in AI infrastructure as systems scale beyond what copper connections can handle.
Amazon Web Services publicly endorsed the transaction, with VP Dave Brown stating the combination “will help further accelerate optical scale-up innovation for next-generation AI deployments.”
Marvell also disclosed that it granted AWS a warrant to purchase 1 million shares related to photonic fabric products, indicating a deeper partnership.
Celestial AI has already secured a key design win with one of the world’s largest hyperscalers for its next-generation scale-up architecture.
The startup’s photonic fabric chiplets will be integrated into both custom AI chips and switches, marking what’s expected to be the industry’s first large-scale deployment of optical interconnects for scale-up connectivity.
Marvell expects Celestial AI to generate meaningful revenue starting in the second half of fiscal 2028, reaching a $500 million annualized run rate by the fourth quarter of that year.
The company forecasts revenue doubling to a $1 billion annual run rate by the fourth quarter of fiscal 2029.
The acquisition follows a pattern of successful M&A for Marvell, including previous deals for Inphi and Innovium that strengthened the company’s data center portfolio.
Management emphasized it plans to fund the deal without taking on additional debt while continuing stock buybacks and dividends.
Despite the post-earnings surge, Marvell stock remains down 18% year-to-date, underperforming semiconductor peers like Broadcom that have benefited more directly from AI excitement.
The company’s aggressive push into optical interconnects and improving outlook for fiscal 2027 and beyond could help close that performance gap if execution continues.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
