Marvell: A Chip and a Prayer

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My aunt Carol, bless her, cornered me at Thanksgiving. She’d read something about AI, naturally, and was convinced it was going to steal her bridge partner’s job. “They’re building these…these thinking machines,” she hissed, stirring an alarming amount of sugar into her coffee. I tried explaining that it wasn’t quite like that, that it mostly involved enormous server farms and a lot of very specialized hardware. She just narrowed her eyes and said, “Sounds expensive.” And, honestly, she’s not wrong. The hyperscalers—Amazon, Microsoft, Google, the usual suspects—are about to drop something like $700 billion on data centers by 2026. It’s a bit much, even for them.

I’ve been poking around the numbers, and it all funnels down to chips. Not the kind you eat with guacamole, but the silicon hearts of this whole AI boom. Everyone’s chasing the same few manufacturers, driving prices up, and generally making it difficult for a reasonably informed investor to find anything resembling a bargain. Until, that is, I stumbled upon Marvell Technology (MRVL 2.53%). It’s not glamorous, I’ll grant you. They make networking chips, the kind of thing that keeps the data flowing. But it’s quietly, steadily, becoming essential.

The Fear Factor

There was a bit of a wobble a few months ago. Reports surfaced that Microsoft was hedging its bets on Marvell’s custom chips, exploring alternatives for their Maia line. Amazon, too, apparently decided to tinker with a different design for their Trainium chips. The market, predictably, panicked. I saw a tweet comparing Marvell to a Blockbuster video store in the age of Netflix. Harsh, but not entirely inaccurate.

Then came the earnings report. And, surprisingly, it was…calming. Management projected a doubling of revenue from custom silicon in fiscal 2027. Not just maintaining, but doubling. They talked about growth with existing customers and, crucially, companion chips for those AI accelerators—networking, memory, security. The kind of unsexy stuff that actually makes the whole system work.

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The CEO, Matt Murphy, even offered a reassuring quote. “We have purchase orders covering the entirety of this fiscal year for this next-generation program,” he said. It sounded…confident. Almost suspiciously so. But then, I remembered my aunt Carol and her bridge partner. Someone needs to keep the data flowing, even if it means protecting a job that’s already on borrowed time.

It’s not just the custom chip business, though. Marvell’s standard networking chips are also in high demand. These hyperscalers aren’t just building AI; they’re building massive data centers. And those data centers need low-latency networking. Apparently, Marvell makes some of the best. It’s like building a superhighway for information. A very expensive, very complicated superhighway.

Management is projecting revenue of $11 billion this year, up 34%. They’re hinting at $15 billion in 2028. And they’re saying earnings per share will exceed $5. It’s aggressive, certainly. But in a world where everyone is chasing the same few chips, it’s not entirely unreasonable.

At around $90 a share, the stock is trading at 24 times this year’s earnings. It’s not a steal, but it’s not outrageous either. Considering the potential growth, it feels…sensible. Like a quiet, reliable investment in a world that’s rapidly becoming anything but. Perhaps I’ll suggest it to Aunt Carol. It might not save her bridge partner’s job, but it might just offer a little peace of mind.

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2026-03-18 17:52