Marvell Technology: $16.5 Billion Revenue Target and Custom Silicon Doubling Signal AI Infrastructure Dominance Is Just Beginning
Q1 Fiscal 2027 Earnings Call, May 27, 2026 — Record Revenue, Accelerating Guidance, and a Sweeping NVIDIA Partnership
Marvell Technology delivered record quarterly revenue of $2.418 billion for its fiscal first quarter of 2027, beating the midpoint of its own guidance and setting the stage for what CEO Matt Murphy described as an accelerating multi-year growth cycle. The company raised full-year fiscal 2027 revenue guidance to approximately $11.5 billion, up over $500 million from last quarter's outlook, and lifted fiscal 2028 guidance by roughly $1.5 billion to $16.5 billion. These are not incremental revisions — they represent a fundamental re-rating of how large and how fast Marvell's AI data center franchise is becoming.
The Numbers Keep Moving Up, and Always in the Same Direction
Second quarter guidance calls for $2.7 billion in revenue, representing 12% sequential and 35% year-over-year growth at the midpoint. More striking is the trajectory beyond that. Marvell now expects both Q3 and Q4 to grow by at least 10% sequentially as well, meaning the company expects to hit $3 billion in quarterly revenue by Q3, a full quarter ahead of prior guidance. Full-year fiscal 2027 data center revenue is now projected to grow approximately 50%, with the interconnect segment specifically expected to grow more than 70% year-over-year, well above the 50% growth originally anticipated. For fiscal 2028, data center revenue growth is expected to accelerate further still to approximately 55%, while total company revenue is projected to grow roughly 45%, off a meaningfully higher base. Non-GAAP EPS for Q1 came in at $0.80, up 29% year-over-year, with Q2 guided in the range of $0.88 to $0.98.
Custom Silicon: $10 Billion Target in Sight and a New Tier 1 Program Ramping
Perhaps the single most important disclosure on the call was Murphy's confirmation that Marvell remains on track to exceed $10 billion in custom silicon revenue in fiscal 2029. This target, first established at Marvell's custom silicon investor event in June 2025, implies a roughly $55 billion total addressable market with Marvell targeting approximately 20% share. For fiscal 2028 specifically, Marvell now expects custom revenue to more than double year-over-year, higher than its prior outlook, driven by three roughly equal contributors: continued growth from existing programs including the flagship XPU, more than ten XPU attach programs scaling into higher production volumes with demand exceeding forecasts, and the ramp of a new Tier 1 XPU program into volume production. Murphy was careful to note that this new program, while on track and hitting all milestones, represents only about one-third of expected custom growth next year — it is important, but not singularly so. He also noted that newer design wins secured since last summer, if completed on the typical two-year development cycle, could contribute incremental revenue in fiscal 2029 essentially as an insurance policy on top of already locked programs.
Interconnect: The Star of the Show, With Scale-Up Optics Just Getting Started
Interconnect is Marvell's largest data center product segment and is growing faster than almost any other line item. The company's 800-gigabit PAM solutions are seeing strengthening demand, while 1.6T products launched in the second half of fiscal 2026 are ramping quickly with another substantial step-up expected in fiscal 2028. Broadband analog TIAs and drivers are scaling so rapidly that Marvell expects that business alone to exceed a $1 billion annualized run rate within the next few quarters. DCI is undergoing what Murphy called a major architectural transition. Traditionally serving front-end inter-site connectivity for hyperscalers, DCI is now being pulled into scale-across architectures, where AI workloads span multiple data centers due to power and space constraints. Aggregate bandwidth requirements for these scale-across networks are projected to be more than ten times those of current front-end DCI networks. Marvell is shipping DCI solutions to all five major U.S. hyperscalers today and expects its DCI module business to reach a $1 billion annualized revenue run rate during fiscal 2028, roughly doubling from the approximately $500 million the business generated in fiscal 2026. Marvell's new 2-nanometer coherent DSP-powered 1.6T ZR and ZR+ modules are expected to begin sampling this year, directly targeting this emerging scale-across opportunity.
Scale-up optics represents what Murphy called "one of the newest and most strategically important opportunities emerging in AI infrastructure." Here, the acquisition of Celestial AI has materially changed the growth outlook. Marvell now expects scale-up optics revenue to more than double its prior forecast of approximately $150 million, putting the new target at over $300 million for fiscal 2028. Murphy was candid about why this is resonating with customers: "We have all the pieces. We have the pieces that can help our customers architect their fully optimized AI infrastructure, and that can be built on Marvell end-to-end technology." The combined Marvell-Celestial team can walk into hyperscalers with full end-to-end solutions spanning custom XPUs, silicon photonics light engines, and switches — a capability set that is genuinely differentiated and not easily replicated. Marvell supports all three mainstream modulator technologies including MZM, EAM, and MRM, and has accumulated more than 15 billion hours of field data across four generations of silicon photonics deployments. The company also announced the acquisition of Polariton, a developer of plasmonic-based silicon photonics devices whose modulator bandwidth has already been demonstrated exceeding one terahertz — up to ten times higher than current silicon photonics and thin-film lithium niobate solutions. This technology is being incorporated into Marvell's DCI and coherent roadmaps, extending the platform to 3.2T and beyond.
Switching: Doubling This Year, Targeting $1 Billion Next Year, Scale-Up Entirely Incremental
Marvell's data center switching business is benefiting from strong demand for its 12.8T products and a ramp of its 51.2T next-generation platform. Scale-out switch revenue is expected to exceed $600 million in fiscal 2027, doubling from fiscal 2026, with line of sight to more than $1 billion in annualized revenue in fiscal 2028. Murphy was particularly emphatic that scale-up switching revenue is essentially not reflected in any current guidance or analyst day targets. "That's all in front of us, and that's all upside," he said. Through the acquisition of XConn and its own internal development, Marvell now supports UALink, ESUN, and NVLink protocols for scale-up switching, positioning it across every major emerging standard. Each of the current Tier 1 customer engagements for scale-up switching represents, in Murphy's framing, a multibillion-dollar lifetime revenue opportunity.
NVIDIA Partnership: Optics, NVLink Fusion, and AI-RAN
The expanded NVIDIA partnership announced alongside earnings contains three pillars that investors should parse carefully. First, Marvell and NVIDIA are collaborating on silicon photonics technology, extending an existing relationship in DSPs, TIAs, and drivers into the scale-up networking stack. Second, NVLink Fusion integration allows Marvell to build custom chips and networking semiconductors that interface directly with NVIDIA infrastructure, giving hyperscalers flexibility to mix and match custom silicon across platforms. Murphy described this as creating new market opportunities for both companies and noted that Marvell "uniquely provides the bridge between these two architectures." Third, Marvell will enhance its existing OCTEON base station processors to work directly with NVIDIA GPUs, enabling telecom operators to run 5G, 6G, and high-performance AI applications concurrently on the same hardware under the AI-RAN initiative. The NVIDIA investment also resulted in additional diluted shares outstanding, which is worth noting in per-share calculations going forward.
Supply Chain: Prepayments Signal Conviction, Not Desperation
CFO Willem Meintjes disclosed that Marvell is forecasting approximately $1 billion in supplier prepayments during fiscal 2027, with the first payments beginning in Q2. These are being applied against future material purchases and funded through operating cash flow, which reached a record $639 million in Q1. COO Chris Koopmans framed the strategy clearly: "We back our forecast with confidence and cash." The approach mirrors the playbook Marvell executed during the last major supply crunch and reflects a high degree of internal confidence in the demand trajectory. Gross leverage stood at 1.44x EBITDA at quarter end, with net leverage at a modest 0.32x, leaving ample capacity. Marvell also repurchased $200 million of stock during the quarter and paid $54 million in dividends.
Non-Data Center: Recovering, But Not a Growth Driver
Communications and other end markets contributed $585 million in Q1, up 3% sequentially and 29% year-over-year. Marvell expects this segment to decline in the mid-single-digit range sequentially in Q2, though it should still show high single-digit year-over-year growth. The inventory correction at carrier and enterprise customers has largely run its course, and going forward this segment is expected to broadly reflect underlying business trends rather than distort them. Full-year fiscal 2027 growth of approximately 10% and low single-digit growth in fiscal 2028 remain the working assumptions — neither a drag nor a meaningful contributor to the overall story.
Operating Leverage: Finally Materializing at Scale
For fiscal 2028, Meintjes guided non-GAAP operating expenses to grow in the mid-to-high teens percentage range year-over-year, dramatically below the approximately 45% revenue growth forecast. As a result, Marvell expects to reach the upper end of its 38% to 40% non-GAAP operating margin target model as it progresses through fiscal 2028. This is the leverage story investors have been waiting for — revenue scaling significantly faster than costs as the platform matures.
Analyst View: The Upside Scenario Is No Longer Speculative
What stands out from this call is not just the magnitude of the guidance increases but the quality of the underlying drivers. Marvell is not chasing a single hyperscaler customer or a single product cycle. The company has simultaneously locked in a flagship XPU program ramping into volume, more than ten XPU attach programs growing faster than expected, an interconnect business accelerating across every sub-segment, a DCI business transitioning into a far larger scale-across opportunity, and a scale-up optics franchise that is in its first commercial generation with years of runway ahead. The new Tier 1 XPU program adds a third major custom compute pillar that is not yet fully reflected in consensus estimates. Scale-up switching contributes essentially nothing to current guidance but represents multibillion-dollar lifetime revenue opportunities already in discussion. And the Polariton acquisition positions Marvell's photonics roadmap at a technology frontier — one terahertz modulator bandwidth — that no competitor has yet reached commercially. At $16.5 billion in projected fiscal 2028 revenue and operating margins approaching 40%, the earnings power of this platform is becoming very large. The primary risk remains execution across an unusually complex multi-program simultaneous ramp, but Marvell's operational track record and supply chain investments suggest that risk is being actively managed rather than hoped away.