Jensen Huang Calls Marvell Potentially "The Next Trillion-Dollar Company"
Taylor Wilson
Nvidia CEO Jensen Huang publicly backed Marvell, calling it a potential next trillion-dollar company. The remark landed alongside Marvell's strong quarterly results and a sharp upward revision to its medium-term outlook, lifting confidence in the custom-AI-chip market to a new high.
What did the quarter actually show?
Marvell posted 1Q FY27 revenue of $2.418 billion (up 28% YoY, 9% QoQ) and Non-GAAP EPS of $0.80, broadly in line with consensus.
Data-center revenue hit a new record at $1.83 billion (up 27% YoY), accounting for roughly three-quarters of total sales. This means → Marvell's growth engine is now overwhelmingly concentrated in a single lane: AI data centers.
Demand for 800G DSPs — high-speed chips that convert optical signals into electrical ones — stayed strong, while 1.6T DSPs began ramping fast. In plain terms = the speed the data center demands is shifting from "fast" to "faster."
What is the company guiding for next quarter and beyond?
2Q FY27 guidance centers on revenue of $2.7 billion (up 35% YoY, 12% QoQ) and Non-GAAP EPS of $0.93, beating consensus by roughly 3% and 2% respectively.
Full-year revenue forecasts for FY27/FY28 were raised to $11.5 billion / $16.5 billion (from $11.0 billion / $15.0 billion), implying YoY growth of about 40% / 45%. This means → management is not sandbagging; it is actively raising its bet on AI demand.
Growth guidance for optical-interconnect products — components that move data between chips using light instead of electricity — jumped from 50% to over 70% for FY27, driven by strong demand for DSPs, TIAs, and drivers.
Custom chips — how does Marvell get to $10 billion?
Management said FY28 custom-chip (XPU) revenue — AI accelerators designed to a specific cloud customer's spec — could more than double YoY, and outlined a roadmap to cross $10 billion in FY29.
Three drivers: ① existing XPU customers ramping orders; ② more than ten XPU-attach programs reaching volume shipment; ③ a new wave of hyperscaler XPU projects entering production ramp in FY28. In plain terms = this is not a one- or two-customer story — multiple programs are scaling at once.
This reflects a broader shift: hyperscalers are moving from "buy Nvidia's general-purpose GPUs" toward "define our own chips and hire firms like Marvell to design them."
What is Wall Street pricing in?
Goldman Sachs raised its target from $125 to $180; Morgan Stanley moved from $172 to $195. Both kept neutral ratings.
This means → the banks endorse the earnings trajectory, but current valuations already partially price in the growth. The real catalyst for further upside is whether custom-chip revenue can beat expectations on delivery.
What is the M&A strategy really about?
Marvell is acquiring Celestial AI, XConn, and Polariton to extend its competitive edge from scale-out interconnect — linking server to server — into two new domains: scale-up optical interconnect (moving data between chips with light) and scale-across data-center interconnect (long-distance links between separate data centers).
The company expects scale-up optical-module revenue to double from an earlier forecast of $150 million to over $300 million in FY28 as Celestial AI's products reach volume production.
In plain terms = Marvell's playbook is "buy the technology, fill the gaps" — transforming itself from a connectivity-chip vendor into a platform company that covers every interconnect layer inside a data center.
Content is for reference only, not financial advice.