Marvell’s (MRVL) Data Center Machine Keeps Rewriting Its Own Forecast

Marvell Technologies (NASDAQ:MRVL) is experiencing rapid growth in its data center machine division, causing the company to revise its financial forecasts. On its latest earnings call in August, Marvell reported record revenue of $2.739 billion for the second quarter of fiscal 2027, a 37% increase year-over-year. Data center sales alone grew by 46% to $2.17 billion, accounting for 79% of the company's business.

Management raised its full-year outlook for fiscal 2027 revenue to approximately $12 billion, up from the previous estimate of $11.5 billion, and for fiscal 2028 revenue to about $18 billion, up $1.5 billion from earlier projections. The acceleration in growth rate is evident, with fiscal 2028 growth now projected at near 50%, up from 45% earlier.

The company's custom silicon business is a significant contributor, with an expanded agreement with a major hyperscaler potentially generating $120 billion in revenue over six years. Marvell's profitability is also improving, with non-GAAP operating margin reaching 36.6%, up 180 basis points year-over-year, and non-GAAP earnings per share growing 40% year-over-year.

However, the company faces challenges such as securing additional chip supply amidst industry constraints and a near-term cost associated with the custom silicon ramp. Despite these challenges, Marvell's growth prospects remain strong, supported by strong demand for data center connectivity and custom silicon.