Marvell Technology stock saw an exponential rise in stock after getting a big endorsement from Nvidia.
CEO Jensen Huang, who reckons the chips-and-networking company can achieve a market value of over $1 trillion.
Marvell shares rose to 18% at $258.57 in the premarket. The stock closed up 7% at $219.43 on Monday, raising its valuation to $192 billion.
Nvidia’s Huang suggested Marvell’s shares could significantly increase to fivefold while speaking at the Computex conference in Taiwan alongside Marvell CEO Matt Murphy. Huang highlighted the need for networking infrastructure to connect data centers to power AI data centers.
Jensen told Murphy, “That’s the reason why Marvell is so essential, That’s why you’re going to be the next trillion-dollar company.”
Notably, Nvidia has heavily invested in Marvel, adding $2 as part of a partnership that will enable customers to use components from both companies to develop semi-custom AI infrastructure.
Nvidia’s investments in other companies in the AI-powered ecosystem have sparked concerns among some critics.
In its latest earnings report, Marvell significantly raised expectations for its interconnect business, forecasting revenue growth of over 70% in fiscal 2027.
The previous forecast had projected growth of around 50%, underscoring the accelerating demand for the company's networking products.
Optical networking opportunity
A major catalyst behind this significant growth is the industry's transition toward optical networking. As AI data centers become more robust, integrated with cutting-edge technology, operators have raised reliance on optical transceivers that convert electrical signals into light, allowing data to travel faster and more efficiently.
Marvell supplies the digital signal processors that power these transceivers, solidifying the company’s position at the center of this expanding market.
As per Barclays analyst Tom O'Malley, Marvell's optical networking revenue could raise by as much as 90% this year and next.
Expanding through acquisitions
To strengthen its position, Marvell recently acquired Celestial AI for $3.25 billion and XConn for $540 million.
