Marvell (MRVL) and GlobalFoundries (GFS) Rise on Expanded Deal: What Investors Should Know

On September 17, shares of Marvell Technology (MRVL) and GlobalFoundries (GFS) surged, with MRVL surging more than 4% and GFS rising over 6%. Reuters revealed that the two companies have broadened their arrangement to augment silicon germanium (SiGe) production capacity for high-speed optical connections in data centers. The multi-year deal expands GFS's SiGe technology at its Burlington, Vermont facility.

SiGe technology enables semiconductor devices to function faster while consuming less energy, which is becoming vital as data centers handle more data. Marvell Technology Vice President of Foundry Technology, Robb Johnson, emphasized that the expanded partnership will guarantee the company has the SiGe technology and manufacturing capability to support anticipated growth.

GFS's recent performance underscores why the increased capacity could be a significant growth catalyst. The company reported $1.786 billion in revenue for Q2 2026, a 6% increase year-over-year, driven by strong demand in its communications infrastructure and data center segment. Revenue from this segment rose 20% sequentially and 62% year-over-year, marking GFS's seventh consecutive quarter of double-digit year-over-year growth.

GFS CEO Tim Breen stated that SiGe demand remains robust and the company is oversubscribed through 2027. Meanwhile, Marvell Technology benefited from AI-focused data center infrastructure demand in Q2 2027, reporting record net revenue of $2.739 billion, a 37% increase year-over-year. The company's Chairman and CEO, Matt Murphy, noted that AI-related bookings remain exceptionally strong and expects revenue growth to accelerate throughout fiscal 2027.

Marvell Technology is experiencing overall strength in its data center portfolio, with robust connectivity demand and a substantial acceleration expected in its custom business from the second half of fiscal 2027. However, the company faces risks if AI infrastructure spending declines. Hedge fund interest in both companies increased in Q2, with 96 hedge funds holding GFS at quarter-end, up from 44 in Q1, while 96 hedge funds held MRVL, compared to 79 in the previous quarter.

Short interest also differs between the two companies, with 5.09% of MRVL's float shorted versus 14.94% for GFS as of August 31. Valuation-wise, MRVL trades at a forward price-to-earnings ratio of 54.64, while GFS trades at 16.86 times forward earnings. While both companies are indirectly affected by the growing demand for AI data center infrastructure, they present different investment profiles.