Marvell Technology is positioned to capture a substantial share of the booming data-center infrastructure market, driven by what analysts describe as an exceptionally “sticky” portfolio of supporting components. According to a recent report from Bank of America, the company’s custom chip and connectivity offerings are making it a primary beneficiary of the ongoing data-center build-out, with projections suggesting it could unlock a $30 billion revenue opportunity within this segment alone.
Vivek Arya, a Bank of America analyst, characterized Marvell as a paragon of “accelerating multiengine growth.” He noted that the company’s end-to-end portfolio for data-center connectivity continues to expand its customer base and product lines annually, a trend expected to drive rapid increases in both revenue and earnings per share.
A critical factor in this growth trajectory is the “XPU attach” business, which encompasses the components that support custom chips—such as networking and storage controllers—in data centers. Arya stated that this segment is significantly “stickier” than the XPU business itself, meaning customers demonstrate higher retention and engagement rates. This loyalty stems from the fact that each custom chip requires one or more sockets for connection to other components.
The financial potential of this segment is substantial. With each component averaging a price point between $500 and $1,500, Arya projects that Marvell could generate $30 billion in revenue from XPU attach products by the end of the decade. The broader total addressable market for these supporting chip components is estimated to reach between $60 billion and $65 billion, or potentially higher, by 2030.
On the custom chip side, Marvell expects its largest customer, Amazon Web Services, to continue growing its orders year over year. Additionally, the chipmaker anticipates starting to ramp up custom product deliveries with Microsoft next year, a move Arya believes will help Marvell gain further market share in the custom chip sector.
Looking ahead, Arya estimates the total addressable market for all custom computing offerings, including both chips and their supporting components, could reach approximately $300 billion by the end of the decade. Marvell is also well-positioned in the scale-up optical networking market, which connects multiple processors to function as a single, more powerful unit. The company’s portfolio includes co-packaged optics, near-packaged optics, and related components.
Despite recent announcements regarding Amazon’s partnership with Qualcomm on optical-connectivity components, Arya indicated that Marvell does not view this as a threat to its optics business. He maintained a buy rating on Marvell stock, which rose 4% on Friday and has surged nearly 178% year-to-date.
Who cares about Qualcomm? Marvell’s co-packaged optics are years ahead. The optical networking segment alone justifies the bull case.
Microsoft ramping up next year is huge. AWS isn’t the only client they’re counting on anymore. Diversification reduces risk significantly.
As someone in the industry, the stickiness makes perfect sense. Once you design around Marvell’s sockets, switching costs are brutal.
178% year-to-date feels overheated. I’ll wait for a pullback before believing the $30 billion projection is actually realized.
That sticky XPU attach revenue model is the real genius here. Recurring income beats one-off chip sales every time.