Marvell Breaks Descending Channel as Interconnect +70% Growth Validates AI Networking Story

Marvell reported Q1 revenue of $2.42 billion, up 27.6% year-over-year and in line with consensus. Data center accounted for approximately 76% of total revenue, driven by a strong year-over-year performance in optical interconnects, customer silicon, and switching, across multiple verticals. Management noted the interconnect business specifically as a notable strength. Management set a new full-year expectation for this segment with an expectation of over 70% year-over-year growth.

This offense can really push the growth of interconnects into the 70% range. This performance can be attributed to the scaling of 800-gigabit products, the fast take off of 1.6-terabits, and new Coherent Light modules for long-reach applications. Inherent in this performance is the fact that more and more AI data centers with high bandwidth requirement between GPUs, memory, and storage will require a higher bandwidth and more efficient optical networking architecture. Marvell is truly becoming the leader and critical component to that architecture.

NVIDIA Partnership Expansion: Validation That Networking Is Central to AI

During Q1, Marvell disclosed an expanded partnership with NVIDIA to integrate Marvell’s custom silicon and optical networking with NVIDIA’s AI ecosystem. The NVIDIA partnership validates an important thesis regarding AI infrastructure: NVIDIA GPUs are only one small part of an infrastructure puzzle. AI infrastructure requires networking and switching, which NVIDIA does not produce.

NVIDIA’s partnership with Marvell validates Marvell’s leadership in networking, and likely increases Marvell’s competitive moat. More customers of NVIDIA’s AI infrastructure will likely buy Marvell as well, increasing Marvell’s wallet share in the data center.

Custom Silicon Growing: The High-Margin Opportunity

Beyond networking, Marvell is developing custom silicon offerings for major hyperscalers. These custom designs, though similar to NVIDIA’s XPU, are also prone to more competitive pressure from Taiwan’s IP providers. This is the greatest risk: as custom silicon becomes more competitive, competitive pressure from lower cost competitors could erode margins. Management has acknowledged this balancing act in recent calls.

Q2 2027 Earnings on August 27: Can Marvell Deliver Another Beat?

During Q1, Marvell provided forward looking guidance for Q2, which management could have easily viewed as conservative. They anticipated revenue would be around $2.7 billion (3% higher than consensus of $2.62B) and adjusted earnings would be $0.93 (against consensus of $0.90). Management either meeting their targets or increasing guidance should lead to further buying in this stock, as the recentlySET technological breakouts would be further substantiated. However, if they are viewed as weak when reported, buying pressure could be decreased, even if the fundamentals are strong.

Marvell Technologies Group Ltd. has broken out of the descending channel that has dominated its price since June. It is trading around $234.33 and has regained both $204.42 support zone and the shorter moving average which is around $215.18. RSI is at 58 and is above the signal line of 48, indicating buyers are gaining control without reaching extreme overbought levels.

Marvell (MRVL) Price Chart - Source: Tradingview

The next significant resistance level is expected to be at $251.40, and a daily close above this level would strengthen the case for price reversal and further expose levels of $275.09 and $298.38. On the downside, the next support level is expected to be at $215.18 - $204.42. Below that $196.21 and $179.91 should provide further support.

Key Technical Levels (Through August 27 & Beyond)

The most important technical level in this environment is expected to provide resistance at $251.40 and break-out level at $251.40. If the price action clears $251.40, extended levels are expected to be at $275.09 and $298.38. On the downside, the primary support area is expected between $215.18 - $204.42, with deeper support expected at $196.21 and $179.91. The RSI is at 58, implying constructive momentum that has ample room to continue before it reaches overbought levels.

What Matters This Week & Next: Jackson Hole + August 27 Earnings

Two events will dominate Marvell's near term - the Jackson Hole Fed commentary (Aug 21-22) and Marvell's Aug 27 earnings. If Powell signals a more dovish policy, that would likely keep capex confidence and Marvell would be able to beat and raise. In that case, the stock could extend to $275 from the current $251. If the Fed signals uncertainty or if Marvell misses expectations, it could pause the break out.

Marvell exceeded expectations breaking out from the downward channel on strong fundamentals. Q1: $2.42B (+27.6% YoY), Data center was 76%, Interconnect grew by 70% (800G, 1.6T, Coherent Light modules), and the NVIDIA partnership expanded. Custom silicon is growing but is becoming more competitive. The $16.5B FY28 revenue target means the company is aiming for 40%+ growth each year until 2028.

Technical: Break out confirmed, with a new target of $251.40. The RSI is currently at 58 indicating the potential for the stock to extend further. Jackson Hole (Aug 21-22) + Aug 27 earnings should be the main catalysts.

For investors: The networking/interconnect story is happening and is likely more valid than the GPU stories. The Aug 27 earnings will showcase execution. If Marvell guides higher on the interconnect, the targets of $251 and higher could be justified. For traders: $204.42 needs to continue supporting the stock. $251 is the clear breakout target. This is analysis, not investment advice.