Shares of Marvell Technology surged on Friday, hitting its all-time high as investor enthusiasm around artificial intelligence infrastructure and optical networking gathered pace.
The stock rose more than 8% to hit a new high of $129.84, and closed at $128.49, marking its first record finish since January 23, 2025, according to Dow Jones Market Data.
The rally also puts Marvell on track for its strongest weekly performance since December 2024.
The latest gains reflect a combination of sector-wide momentum and company-specific developments, as investors increasingly position for the next phase of AI-driven data center expansion.
AI and optical networking drive renewed momentum
Marvell’s resurgence comes despite earlier concerns that it could fall behind in the AI race.
The company, which produces application-specific integrated circuits as alternatives to GPUs, had faced questions over its exposure to key customers and the drag from non-AI segments.
However, its positioning in optical networking has emerged as a key growth driver.
As AI data centers scale, demand is rising for faster, higher-bandwidth, and lower-latency connectivity solutions, areas where Marvell has a strong presence.
Barclays analyst Tom O’Malley highlighted the scale of this opportunity, noting that the market for optical ports is expected to double this year and again in 2027. This could translate into roughly 90% growth for Marvell’s optical business in both periods.
“Marvell is first and foremost an optical company and with ports growing rapidly the market growth carries the name alone,” he said in a Thursday note.
O’Malley upgraded the stock to overweight from equal weight, signaling renewed confidence after previously flagging concerns around manufacturing share losses tied to Amazon Trainium chips and potential issues with digital-signal processors.
Strategic deals and AI spending boost sentiment
Investor optimism has also been fueled by fresh strategic developments. Marvell recently secured a $2 billion investment and expanded its partnership with NVIDIA, both aimed at supporting next-generation AI data centers and high-speed connectivity.
The announcements have reinforced Marvell’s role in the AI infrastructure ecosystem, particularly as hyperscale companies accelerate spending on data center buildouts.
Bank of America has also flagged Marvell among its top “AI compute” picks, alongside Advanced Micro Devices, citing its leadership in high-speed networking and data center switching.
The bank noted that companies such as Alphabet and Microsoft continue to invest heavily in AI infrastructure, providing a strong demand backdrop for suppliers like Marvell.
Strong fundamentals tempered by valuation concerns
Marvell’s recent rally builds on already strong performance, with the stock up 51% year-to-date and nearly doubling over the past year.
Financial results have supported the bullish case. In the fourth quarter of fiscal 2026, revenue rose 22% year-over-year to $2.219 billion, while earnings per share jumped 81% to $0.46. For the full fiscal year, revenue climbed 42% to $8.195 billion, with EPS reaching $3.07.
CEO Matt Murphy pointed to “robust AI demand” as a key driver of growth, with expectations for further expansion into fiscal 2027.
However, the strong run has also pushed valuations higher. Marvell now trades at around 30 times forward earnings and roughly 9 times forward sales, levels that could expose the stock to downside risks if growth expectations are not met.
Competition remains another factor, with major players such as Broadcom and NVIDIA competing across key segments of the AI infrastructure stack.
Still, with demand for AI networking and custom silicon continuing to accelerate, Marvell appears increasingly well-positioned to benefit from the next wave of data center investment, even as investors weigh valuation risks against long-term growth potential.
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