Marvell Technology, a key supplier of the networking gear that powers artificial intelligence data centers, could see a major boost from Google in the coming years, according to analysts at RBC Capital Markets. The call comes even after Marvell's shares tumbled nearly 8% on Friday, a reminder that even well-regarded AI plays can be volatile.
What's driving the optimism?
Marvell makes the "plumbing" that helps AI data centers move data quickly and efficiently. That includes optical networking equipment—the lasers and transceivers that send information between servers—and custom chips designed for big cloud customers like Google, Amazon, and Microsoft.
RBC says demand for these products should keep climbing as operators upgrade to faster 800G and 1.6T optical connections. Those numbers refer to the speed at which data travels, measured in gigabits per second. The jump from 800G to 1.6T is like going from a four-lane highway to an eight-lane one, allowing AI models to process more data without bottlenecks.
The bank also points to "scale-up" networking, which connects the thousands of chips inside a single AI server cluster. This is different from "scale-out" networking, which links separate clusters. As AI models get larger, the need for high-speed connections within clusters grows, and Marvell is positioned to benefit.
Google's role in Marvell's future
RBC specifically calls out Google as a potential "Google-sized" tailwind starting in fiscal 2029. That's the company's fiscal year, which for Marvell ends in late January or early February. So fiscal 2029 would begin in early 2028.
Why Google? The search giant is one of the biggest spenders on AI infrastructure, building out massive data centers to support its own AI models and cloud services. Marvell already works with Google on custom chips, and RBC believes that relationship could deepen over time.
It's worth noting that RBC's view is a forecast, not a guarantee. The timeline is several years out, and tech spending can shift quickly. But the analyst's confidence suggests that Marvell's AI story is far from over, even after a rough Friday.
Why the stock fell
The nearly 8% drop on Friday likely reflects broader market jitters about AI valuations and profit-taking after a strong run. Marvell's stock has been a big winner over the past year, as investors piled into companies that supply the AI boom. But such stocks can swing sharply on any hint of disappointment or macroeconomic worry.
For everyday investors, the lesson is that even solid growth stories can be bumpy. A single day's move doesn't change the long-term picture, but it's a reminder to stay diversified and not chase momentum.
What it means for investors
Marvell is a direct play on the AI infrastructure buildout, which remains one of the strongest trends in tech. Companies are spending billions on data centers, and that spending is expected to continue for years. Marvell's optical networking and custom chip businesses are central to that trend.
However, the stock's valuation is not cheap, and competition is intense. Nvidia dominates the AI chip market, and other players like Broadcom also compete in custom silicon. Marvell's success depends on winning and keeping big cloud customers like Google.
RBC's note is a positive signal, but it's a single analyst's view. Investors should weigh it alongside other research and their own risk tolerance. As always, it's wise to think long-term and avoid making decisions based on one day's price action.
For more on how AI is shaping markets, check out Morgan Stanley's bullish Nvidia outlook and how other tech names are positioning for growth.
