Marvell Targets $94 Billion AI Chip Market by 2028

Wall Street analysts cautiously optimistic as custom silicon pipeline expands across hyperscalers

Marvell Unveils Ambitious AI Strategy

Marvell Technology (NASDAQ: MRVL) has revealed a bold vision for its custom AI chip business, aiming to tap into a total addressable market (TAM) of $94 billion by 2028. The announcement, made during the company’s recent custom AI silicon event, received a mix of optimism and caution from Wall Street.

Data Centre TAM Raised by 26%

The company has upgraded its data centre TAM forecast from its previous outlook, citing surging demand for accelerated computing:

• New TAM estimate: $94 billion by 2028
• Driven by custom accelerated computers, forecast at $55.4 billion
  • Of which, $40.8 billion is from custom XPU
  • $14.6 billion from XPU attach

These numbers highlight Marvell’s growing focus on custom silicon, a space dominated by the needs of hyperscale customers such as Microsoft and Amazon.

Strong Pipeline—but Revenue Is Years Away

Analysts at Barclays noted a promising $75 billion revenue pipeline spread across 50+ socket opportunities with over 10 customers. However, they warned that most of these wins won’t contribute revenue until at least 2028.

Morgan Stanley echoed this, stating Marvell is “firmly in the AI winner camp,” but flagged its Equal-weight rating due to valuation concerns. The bank noted Marvell is targeting a 20% market share, with more than half of its data centre revenue eventually expected from custom chips.

Hyperscaler Wins and New Product Launches

Marvell revealed several new custom chip designs at the event:

• 2 new XPU sockets
• 4 new attach sockets

This brings the company’s total custom silicon wins to 18, including partnerships with both top-tier and emerging hyperscalers.

While Marvell reaffirmed ties with Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN), questions remain about its precise role in Amazon’s Trainium 3 project and its longer-term contributions from Microsoft past 2026.

Analyst Concerns: Are Projections Too Ambitious?

Despite the bold outlook, analysts voiced reservations about the lack of near-term revenue clarity.

• Barclays said the event “did little to move the needle,” citing uncertainty around major client contributions
• Morgan Stanley suggested some figures “almost seem too ambitious”
• Both banks want to see tangible execution in the next 12–24 months

However, Morgan Stanley acknowledged the breadth of new opportunities is impressive, noting a potential step-change in revenue by 2027 as projects mature.

Market Reaction: Modest but Positive

Despite analyst caution, the market responded favourably:

• Marvell shares rose 1% in premarket trading as of 09:23 GMT Wednesday
• Investors appear encouraged by the company’s expanding footprint in the AI chip race

Summary: AI Ambitions with a Long Horizon

• Marvell boosts data centre TAM to $94 billion by 2028
• Custom chip focus includes XPU and attach sockets for hyperscalers
• 50+ design wins across 10+ customers but revenue impact likely from 2028 onwards
• Analysts remain cautious due to execution risk and valuation
• Stock moves higher on confidence in long-term AI positioning

Sources: (Investing.com, ChatGPT)