Marvell Forecasts Q2 Beat on AI Chip Demand

On May 29, Marvell Technology announced that its second-quarter revenue is expected to exceed Wall Street forecasts, driven by growing demand for its custom silicon designed to accelerate artificial intelligence (AI) workloads in data centers.

The surge in interest for custom AI chips has been accompanied by strong momentum in networking and electro-optical chip orders. These trends are playing a vital role in helping hyperscale data center operators expand their infrastructure to meet the rapidly increasing demands of AI.

During its earnings call, Marvell highlighted that the favorable AI tailwinds are expected to remain strong. This outlook is supported by increased investments from hyperscale cloud providers, the rollout of sovereign data center initiatives, and expansion by emerging market players—all contributing to market growth and new business opportunities.

Marvell's data center segment generated $1.44 billion in revenue in the first quarter, accounting for 76% of the company's total revenue. Following a period of inventory correction, its carrier and enterprise networking divisions are also showing signs of recovery.

However, Marvell's consumer segment remains under pressure, with revenue falling 29% quarter-over-quarter to $63.1 million, partly due to seasonal fluctuations in gaming demand. The industrial segment also faced challenges, with a 12% sequential decline in revenue.

Angelo Zino, senior equity analyst at CFRA Research, commented, “We believe Marvell's custom silicon business will be a key growth driver over the next three to five years. While margins may be lower, the segment is expected to contribute meaningfully to operating income.”

According to data compiled by the London Stock Exchange Group, Marvell is projecting Q2 revenue of approximately $2.0 billion, compared to analysts' average estimate of $1.98 billion—an expected range of plus or minus 5%.