Chipmaker Marvell Technology on Thursday announced new business making custom AI chips for large U.S.-based cloud computing firms. But Marvell stock didn't get much of a boost from the news.
At its "Accelerated Infrastructure for the AI Era" event in New York City, Marvell said it has added a third hyperscale cloud company to its AI customer list. Marvell said it will make an AI accelerator for the unnamed customer, with production ramping in 2026.
In a client note, Susquehanna Financial Group analyst Christopher Rolland speculated that the new customer is Microsoft.
Marvell currently makes custom artificial intelligence processors for Amazon.com, analysts say. At the event, Marvell said it makes AI training accelerators for what it calls "customer A" and has won new business with them to produce AI inference accelerators starting next year.
For its second customer, Marvell is making central processing units for servers based on Arm technology. Production of the Arm CPUs is ramping now, Marvell said. The second customer is probably Alphabet's Google, JPMorgan analyst Harlan Sur said in a recent report.
Marvell Stock Recovers For Small Gain
On the stock market today, Marvell stock climbed 0.2% to close at 71.53. It had been down for much of the session.
Marvell showed off its "strong portfolio of AI products across connectivity and custom compute" at the event, Rolland said. He has a positive rating on Marvell stock with a price target of 95.
Marvell sees its AI revenue rising from about $200 million last year to more than $550 million in fiscal 2024. The company also raised its AI revenue forecast to over $1.5 billion for fiscal 2025 and to over $2.5 billion for fiscal 2026.
Elsewhere on Wall Street, CFRA Research analyst Angelo Zino reiterated his strong buy rating on Marvell stock after the event.
Companies Holding AI-Focused Events
Marvell is the latest tech company to hold an investor briefing focused on artificial intelligence. Marvell's AI event follows similar events in recent weeks by Adobe, Broadcom, Google, Intel, Microsoft and Nvidia.
Marvell competes with Broadcom in the market for custom AI chips known as application-specific integrated circuits, or ASICs.
Santa Clara, Calif.-based Marvell makes AI infrastructure products spanning compute, connectivity and storage.
Marvell stock is on the IBD Tech Leaders list.
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