Chip developer Marvell Technology has become more expensive than Intel thanks to the AI ​​boom

The American company Marvell Technology for the first time overtook Intel in market capitalization, which for the first time exceeded $100 billion, while Intel’s figure fell to $90 billion. This success is due to sharp growth in revenue in the data center chip segment, which now accounts for 72% of Marvell’s revenue , as well as its strategic partnership with Amazon.

Image source: marvell.com

Under the leadership of Matt Murphy, Marvell Technology has grown from a relatively small company into one of the leaders in the global chip market. Over the course of 7 years, its market value increased from $5 billion to more than $100 billion. The latest jump occurred against the backdrop of a successful quarterly report, as a result of which the company’s shares rose in price by 18%. Although Marvell’s annual revenue is 10 times smaller than Intel’s, its advances in data centers and AI make it an important player in the industry.

Murphy, who has headed Marvell since 2016, was in the media spotlight as a possible candidate to head Intel after the dismissal of Pat Gelsinger. However, on December 3, Murphy publicly denied these rumors, stating: “[Marvell] is an outstanding company. Technology is best in its class. I can’t imagine a better place to work than Marvell.” Under his leadership, Marvell not only increased its market value by almost 20 times, but also made significant strides in the development of AI chips.

The data center chip segment has become a key growth driver for Marvell, offsetting revenue declines in traditional businesses such as telecommunications equipment, cable set-top boxes and automotive electronics. The share of the company’s revenue attributable to data centers increased over the year from 40% to 72%. This demonstrates Marvell’s strategic focus on cloud and high-performance computing.

The five-year agreement with Amazon opens up new prospects for Marvell in the field of AI. One of the company’s key tasks will be to participate in the development of the Trainium chip, a powerful processor for training AI models, which Amazon presented at its annual developer conference. Analysts predict the collaboration will double Marvell’s revenue from custom AI chips in the next fiscal year. As such, Marvell continues to strengthen its position as a leading partner to major technology corporations.

Despite the outstanding results, analysts warn of possible risks associated with Marvell’s reliance on AI investments. Any slowdown in the sector’s growth or temporary pauses in equipment purchases by major customers such as Amazon or Microsoft could negatively impact its financial performance. Such “digestion periods” have long been a characteristic feature of the data center market. Moreover, Marvell shares are trading at a 21% premium to Nvidia’s multiple, making the company especially sensitive to a possible market correction.

Marvell demonstrates an impressive ability to adapt to market changes by focusing on innovation and cutting-edge technology. However, the company’s high market valuation makes it responsible for maintaining growth momentum in the face of potential future demand volatility.