Driven by the strong wave of artificial intelligence data center construction, semiconductor company Marvell Technology (MRVL) delivered a first-quarter fiscal 2027 earnings report that comprehensively exceeded expectations after the U.S. stock market closed on May 27 Eastern Time. The company also significantly raised its financial outlook for the full year and the coming years. Bolstered by this news, the company’s stock surged nearly 10% in after-hours trading. It is estimated that U.S. tech giants’ spending on AI infrastructure this year will exceed $700 billion, a substantial increase from 2025.
According to the earnings report, Marvell Technology’s first-quarter revenue grew 28% year-over-year to $2.42 billion, surpassing market expectations of $2.41 billion. Adjusted earnings per share were $0.80, higher than the analyst consensus estimate of $0.79. The company’s core growth engine, the data center business, achieved revenue of $1.83 billion in the quarter, up 27% year-over-year, also exceeding market expectations. This business increased its share of total revenue to 76%, up from 74% in the previous quarter.
Looking ahead to the second quarter, the company’s guidance excited the market. The midpoint of expected second-quarter revenue is $2.70 billion, and the midpoint of adjusted earnings per share guidance is $0.93, both above the average analyst estimate. Chairman and CEO Matt Murphy stated in the earnings release that first-quarter revenue reached an all-time high. Benefiting from strong momentum in AI-related orders, the company has significantly raised its revenue outlook for fiscal 2027 and 2028. The company expects revenue growth to accelerate sequentially throughout fiscal 2027, driven by the continued strong performance of the data center business.
The company expects full-year revenue for fiscal 2027 to reach approximately $11.5 billion, representing year-over-year growth of about 40%, higher than previous expectations. Furthermore, the revenue forecast for fiscal 2028 has been raised to approximately $16.5 billion, implying another roughly 44% increase from fiscal 2027. More strikingly, Marvell Technology expects its custom chip business revenue to surpass the $10 billion mark by fiscal 2029.
Behind Marvell Technology’s consistent earnings outperformance is the strong support from its two core growth engines: AI custom chips and optical interconnects. As cloud computing giants accelerate the construction of AI data centers, more and more companies are adopting custom AI chip solutions to reduce dependence on general-purpose GPUs. Marvell Technology and Broadcom together control approximately 95% of the custom AI ASIC co-design market. Currently, the company’s custom chip business has an annualized revenue of about $1.5 billion, has secured design wins from 18 cloud providers, and has co-designed the Trainium 2 chip with Amazon, as well as developed the Maia AI chip with Microsoft. In the optical interconnect field, leveraging its leading position in 800G and 1.6T digital signal processors, Marvell Technology is considered by analysts to be a “primary beneficiary” of this “multi-year supercycle.”
