MRVL: ASIC card miss; wins back AI with interconnect.

Marvell (MRVL) reported Q4 FY2026 (ended Jan 2026) after the U.S. market close on Mar 6 Beijing time. The print came after hours.

1. Revenue: $2.22bn this quarter, +7% QoQ, in line with the Street ($2.21bn). The $150mn QoQ uplift was driven primarily by Data Center.

2. GPM: headline GPM was 51.7%, up 10bps QoQ. As reported GAAP GPM is affected by acquisition-related amortization, it does not fully reflect operating performance. Ex-amort., adj. GPM was 58.5%, down 50bps QoQ, a structural mix drag from lower-margin custom ASIC.

3. Data Center: key focus. Segment revenue was $1.65bn, +8.8% QoQ, led by custom ASIC and optics/interconnect, lifting Data Center to 74.4% of total. Dolphin Research estimates $Marvell Tech(MRVL.US) AI revenue at ~$960mn, +$110mn QoQ.

Amazon announced Trainium 3, and market checks suggest Alchip is the main supplier. Marvell remains an AMZN supplier, focused on Trainium 2.5 (a mid-cycle rev of Trainium 2), consistent with management’s prior comment of ‘no revenue gap’.

4. Next-quarter guide: revenue $2.4bn, above the Street ($2.27bn), QoQ growth driven by custom ASIC and Data Center. GPM (GAAP) 51.4%–52.4%, broadly stable.

5. Full-year outlook: FY2027 revenue raised to $11bn (from $10bn), +34% YoY. ASIC to grow 20%+, optics/interconnect to grow 50%+. FY2028 revenue raised to $15bn (from $13bn), ~+40% YoY.

Dolphin Research view: guide raised again; clear push to ‘scale-out clusters’ capability

Marvell’s print broadly matched expectations, with growth largely from Data Center. Ex-amort., adj. GPM was 58.5%, down 50bps QoQ, reflecting mix shift toward lower-margin custom ASIC.

The company simplified segment disclosure from five to two (Data Center; Comm. & other), highlighting Data Center’s primacy. Data Center was the main growth driver this quarter, +8.8% QoQ, and Dolphin Research estimates AI revenue at ~$960mn.

Beyond the quarter, guidance was ‘quite constructive’. Marvell guides next-quarter revenue to $2.4bn, +8% QoQ, topping the Street ($2.27bn), driven by optical module chips and custom ASIC.

Management again raised the multi-year outlook. FY2027 revenue is guided to $11bn (+34% YoY), with Data Center AI contributing most of the uplift.

Key watch items for Marvell’s AI business:

a) Capex at the mega-customer: Amazon is the largest AI customer for Marvell, and hyperscaler capex underpins AI growth. Marvell’s Data Center growth trails AMZN’s capex growth when viewed side by side.

Even if AMZN lifts 2026 capex to $200bn (~+50% YoY), Marvell captures only part of that uplift, with mgmt now expecting Data Center growth of 40%+, still below AMZN capex growth.

Dolphin Research believes custom ASIC is the drag (company guides 20%+ growth), implying AMZN is not fully satisfied with Marvell’s ASIC. Marvell supplied Trainium 2/Inferentia 3 previously, yet AMZN awarded most Trainium 3 to Alchip, with Marvell focused on Trainium 2.5 (a mid-cycle rev of Trainium 2).

b) AI chip market share: vs. NVIDIA and Broadcom, Marvell’s share is tiny at ~1%. Expectations for share gains were high, but performance remains ‘muted’. The core customer is still AMZN, and Marvell’s Trainium share is slipping, pointing to insufficient product competitiveness.

c) Acquiring Celestial AI & XConn: expanding into ‘scale-out + scale-up’ across scenarios

① Celestial AI: bolsters silicon photonics and CPO, core to scaled interconnect. Its ‘Photonic Fabric’ enables large-scale CPO deployment, with revenue contribution starting 2028. The first chiplet is moving to mass production, with FY2028 Q4 CPO ARR at $500mn (i.e., ~$125mn per quarter), and FY2029 Q4 at $1bn (i.e., ~$250mn per quarter).

② XConn: strengthens PCIe/CXL switching to expand AI infra interfaces. It had 20+ customers pre-deal, and should scale quickly via Marvell’s global sales network, targeting leadership in PCIe/CXL switching while reinforcing UA-LINK and accelerating the scaled switching roadmap.

Taking (a+b+c) together, while custom ASIC engagement with AMZN has been bumpy, Marvell is steadily expanding interconnect capabilities across Data Center. Rather than just ‘selling cards’, the company aims to be a provider with ‘scaled cluster’ capabilities.

With the current mkt cap at ~$64.2bn, Marvell screens at ~23x FY2027 adj. net income (assuming revenue +34% YoY, adj. GPM 57.6%, adj. tax rate 10.6%). Valuation sits between NVIDIA (~20x) and Broadcom (~27x).

Shares have been soft recently, on concerns about hyperscaler capex beyond 2027 (a sharp deceleration in 2028) and the fact that Trainium 3 is mainly with Alchip. Management’s renewed multi-year uplift should help sentiment. Even if the ‘disappointing’ ASIC segment grows only 20%+, optics/interconnect can still drive attractive growth.

Comparing AMD and AVGO, hyperscalers in AI Data Centers prize ‘scaled cluster’ capabilities over simply ‘selling cards’.

While Celestial AI & XConn will not add revenue near term, the strategy is clearer. Building out interconnect breadth to become a ‘scaled cluster’ provider should attract more customers and strengthen competitiveness.

Dolphin Research’s detailed take on Marvell (MRVL):

I. Marvell’s biz.

Marvell started with storage and expanded via a series of bolt-on M&A, with Data Center now its largest revenue driver. Details by segment:

1) Data Center (~75%): high-growth, benefiting from Data Center and ASIC demand, and the market’s key focus. Includes optics/interconnect, SSD controllers, and custom ASIC (AMZN AWS, GOOGL Axion CPU, etc.), serving cloud servers and edge computing.

2) Other (~25%): legacy Enterprise Networking, Carrier Infrastructure, Consumer, Auto & Industrial are now grouped into ‘Comm. & other’.

II. Key metrics: EBITDA trending up

2.1 Revenue

Marvell delivered Q4 FY2026 revenue of $2.22bn, +7% QoQ, in line with the Street ($2.21bn). Growth was driven by Data Center, notably custom ASIC and optics/interconnect.

2.2 Gross profit

Q4 FY2026 GP was $1.15bn, +$80mn QoQ. Headline GPM was 51.7%.

Given amortization from acquisitions obscures GAAP GPM, we reference adj. GPM. Adj. GPM was 58.5%, down 50bps QoQ, mainly due to a higher mix of lower-margin custom ASIC.

2.3 Opex & profit

Q4 FY2026 net income was $400mn. Ex non-recurring items, EBITDA was $740mn, with EBITDA margin rising to 33.5%. Opex was stable to slightly down, and the QoQ improvement was mainly volume-driven.

III. Segment highlights: guide raised again; building ‘scaled cluster’ capability

Since 2018, Marvell has acquired Cavium, Innovium, and others, strengthening ASIC and Data Center capabilities. With rising demand from AMZN and GOOGL for custom ASIC and optics/interconnect, Data Center is on an uptrend and the biggest driver of results.

This quarter, traditional segments were consolidated into Comm. & other, while Enterprise Networking, Carrier, Consumer, and Auto/Industrial each fell to ~10% or less of total.

3.1 Data Center

Q4 FY2026 Data Center revenue was $1.65bn, +8.8% QoQ, in line with the Street ($1.64bn). Growth was driven by custom ASIC and optics/interconnect.

AI already accounts for most of Data Center. Dolphin Research estimates AI revenue at ~$960mn, +$110mn QoQ; non-AI storage and other offerings saw modest sequential upticks. AI as a share of total held above 40%, and mgmt’s goal remains 50%+.

Management raised the outlook again, now guiding FY2027 Data Center growth of 40%+. Optics/interconnect to grow 50%+, and custom ASIC 20%+; FY2028 Data Center growth to ~50%.

On ASIC, AMZN is the main customer, and AMZN recently lifted 2026 capex by ~50% YoY. Marvell’s 20%+ full-year ASIC growth guide is still notably lower.

Market checks indicate AMZN’s latest Trainium 3 went to Alchip. Marvell is focused on Trainium 2.5 (a mid-cycle rev), and its share in AMZN’s supply chain has slipped, implying ASIC growth below AMZN capex growth.

Versus ASIC, Dolphin Research sees the core priority shifting to ‘scaled cluster’ capability, supported by the acquisitions of Celestial AI & XConn.

① Celestial AI: bolstering silicon photonics and CPO, core to scaled interconnect

Key tech is Photonic Fabric (PF), enabling large-scale CPO commercialization, with revenue contribution from 2028. The first chiplet is moving to mass production, with FY2028 Q4 CPO ARR at $500mn (~$125mn per quarter) and FY2029 Q4 at $1bn (~$250mn per quarter).

② XConn: enhancing PCIe/CXL switching, expanding AI infra interfaces

It had 20+ customers pre-acquisition, and should scale quickly via Marvell’s global sales, potentially becoming a core PCIe/CXL switching player. It also reinforces UA-LINK and accelerates the scaled switching roadmap.

Comparing AMD and AVGO share performance, hyperscalers value ‘scaled cluster’ capability in AI Data Centers over simply ‘selling cards’.

Celestial AI & XConn may not add near-term revenue, but the strategic focus is clear. Building interconnect depth to become a ‘scaled cluster’ provider should drive broader customer adoption and competitiveness.

3.2 Comm. & other

The company consolidated disclosure to Comm. & other, no longer breaking out Enterprise Networking, Carrier, Consumer, Industrial, etc. Q4 FY2026 Comm. & other revenue was $570mn, +25% YoY, driven by a rebound in enterprise networking and carrier infrastructure.

Management guides steady growth for Comm. & other, with FY2027 at ~10% and FY2028 in the low single digits. Trajectory remains stable.