SANTA CLARA, Calif. - Marvell (NASDAQ:MRVL) Technology, Inc. (NASDAQ: MRVL), a semiconductor company whose stock has surged nearly 98% over the past year according to InvestingPro data, has announced an advancement in its custom AI accelerator architecture, integrating co-packaged optics (CPO) technology to significantly enhance server performance. This new architecture allows for the expansion of AI server capabilities, scaling up from tens of XPUs within a single rack to hundreds across multiple racks. With a market capitalization of over $102 billion, Marvell has positioned itself as a significant player in the AI infrastructure space.
The company's custom AI accelerator combines XPU compute silicon, high-bandwidth memory (HBM), and other chiplets with Marvell 3D SiPho Engines on the same substrate. This approach eliminates the reliance on electrical signals traveling through copper cables or across a printed circuit board, enabling faster data transfer rates and distances up to 100 times longer than electrical cabling. The result is improved latency and power efficiency for AI servers. InvestingPro data shows strong analyst confidence in Marvell's direction, with 28 analysts recently revising their earnings expectations upward for the upcoming period.
Marvell's CPO technology integrates optical components directly within a single package, reducing signal loss and enhancing signal integrity. The technology leverages Marvell's silicon photonics optical engines, which provide higher data transfer rates and are less susceptible to electromagnetic interference than traditional copper connections. The integration also leads to improved power efficiency by reducing the need for high-power electrical drivers.
The Marvell 3D SiPho Engine, a key component for incorporating CPO into XPUs, was first demonstrated at OFC 2024. It supports 200Gbps electrical and optical interfaces and combines numerous components to deliver double the bandwidth and input/output bandwidth density, with a 30% reduction in power per bit compared to devices with 100G interfaces.
Marvell has a history of delivering silicon photonics technology, with over 10 billion device hours of field operation logged. The company's interconnect portfolio includes high-performance SerDes and die-to-die technology IP, PCIe retimers, CXL devices, and various digital signal processors for data center connectivity.
According to LightCounting, a market research firm, CPO technology is expected to see significant growth, with port shipments projected to increase from under 50 thousand today to over 18 million by 2029, primarily for server connections.
This advancement in Marvell's custom AI accelerator architecture with CPO technology is set to provide cloud hyperscalers with the ability to develop custom XPUs that meet the growing demands of AI applications. The information provided is based on a press release statement from Marvell Technology, Inc.
In other recent news, Marvell Technology has been in the spotlight due to its impressive growth and strategic advancements. KeyBanc Capital Markets maintained its Overweight rating on Marvell, setting a price target of $125 based on FY26 earnings per share estimates. This comes after the company reported a 75% year-to-date return, with 28 analysts revising their earnings expectations upward. Marvell also recently launched a 1.6 Tbps optical chipset and a custom High-Bandwidth Memory (HBM) compute architecture, both aimed at enhancing data transfers and AI performance.
Raymond (NS:RYMD) James and CFRA analyst Angelo Zino increased their price targets for Marvell to $130, citing strong growth prospects. Raymond James anticipates a potential revenue compound annual growth rate (CAGR) of over 25% for Marvell over the next three to four years if AI spending remains strong. Earnings per share (EPS) estimates for fiscal years 2025, 2026, and 2027 have been revised upwards by 28 analysts, reflecting optimism for the company's financial performance in the coming years.
CFRA analyst Angelo Zino has also adjusted the EPS forecasts for the coming fiscal years, raising the fiscal year 2025 EPS estimate to $1.63 from $1.56, fiscal year 2026 to $2.76 from $2.73, and fiscal year 2027 to $3.72 from $3.48. These adjustments reflect the anticipated scaling of the market for custom silicon chips, particularly as production by hyperscalers is expected to ramp up significantly from 2025 to 2027.
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