Marvell's AI growth is driven by optical components and networking, not custom chips.
In Q2 F2027, AI revenue hit $1.82 billion, with electro-optics at $1.4 billion.
Custom chip sales were only about $425 million.
What happened
In Q2 F2027, Marvell's datacenter sales hit $2.17 billion, up 45.7% year on year. AI revenue reached an estimated $1.82 billion, with electro-optics contributing around $1.4 billion, up 97.2%, while custom AI chip sales were only about $425 million.
Why it matters
Optics and networking components, not custom chips, are the main growth engine for Marvell's AI business. The company's custom chip deals with AWS and Google are still relatively small, but the datacenter now makes up 79.3% of total sales.
What to watch
Marvell raised its full-year F2027 revenue guidance to $12 billion and expects Q3 sales of about $3.15 billion. First revenues from Google's expanded partnership hit in Q3, and custom CPU/XPU sales are projected to double in F2028.
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Marvell's datacenter business has grown 8.1X since Q2 F2021, while legacy chip units grew only 1.3X. This shift mirrors Nvidia's transition, where non-datacenter products are lumped into a single group. The company's AI revenue is up 23.6X from three years ago, but the bulk comes from electro-optics, not custom ASICs. Marvell's custom chip deals with AWS (for Graviton) and Google are growing, but they are still a smaller piece of the AI pie. The company raised its F2027 revenue guidance to $12 billion and expects F2028 to hit $18 billion, driven by datacenter growth over 60%. To fund these efforts, Marvell holds $3.93 billion in cash. The company may sell other divisions to sharpen focus on GenAI, as it did with its automotive chip business.
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