Marvell Technology, Inc. (NASDAQ: MRVL) is at the center of a tug‑of‑war on December 8, 2025: the stock is selling off hard on worries about losing big cloud customers just days after the company reported record AI‑driven results and announced a multibillion‑dollar bet on next‑generation optical networking.
Around mid‑session Monday, Marvell shares were trading near $90, down roughly 9% on the day, after news that Microsoft may shift some custom AI chip work to Broadcom and a key analyst downgrade focused on potential AI design losses at Amazon Web Services (AWS). [1]
At the same time, Wall Street’s broader view of Marvell remains notably positive. Consensus 12‑month price targets cluster in the low‑$110s to mid‑$120s, implying double‑digit upside from today’s levels, and many analysts still see the company as a prime beneficiary of the AI data‑center build‑out. [2]
Below is a detailed look at what changed on December 8, 2025, and how it fits into the longer‑term Marvell story.
Why Marvell Stock Is Falling Today
Microsoft–Broadcom chatter hits sentiment
The immediate catalyst for today’s drop was a report (via The Information) that Microsoft is in talks with Broadcom to design future custom AI chips, a role investors currently associate with Marvell. Coverage of that report notes that Marvell sank more than 6–7% in early trading, while Broadcom gained over 3%. [3]
The concern is straightforward: Marvell’s custom AI accelerators (“XPUs”) for hyperscale cloud providers are central to its long‑term AI growth story. If Microsoft were to migrate some of that work to Broadcom, investors fear Marvell’s future revenue pool could shrink, or at least grow more slowly than previously expected.
Benchmark downgrade on AWS Trainium worries
Layered on top of the Microsoft headlines is a sharply bearish call from Benchmark analyst Cody Acree. Benchmark:
- Downgraded Marvell from “Buy” to “Hold”,
- Pulled its price target entirely, and
- Argued with a “high degree of conviction” that Marvell has lost AWS’s Trainium 3 and Trainium 4 AI chip designs to rival Alchip Technologies. [4]
Benchmark suggests this could slow Marvell’s AI XPU growth to roughly 20% in 2026, and recommends investors take profits after the stock’s recent run‑up.
That call lands awkwardly for Marvell because, just days earlier, management guided to accelerating AI‑related growth, pointing to strong visibility in custom programs with major hyperscalers.
JPMorgan pushes back: “noise,” not thesis change
JPMorgan’s Harlan Sur is effectively on the other side of that trade.
On December 8, JPMorgan reiterated an “Overweight” rating and a $130 price target, explicitly dismissing concerns that Marvell is losing Microsoft or AWS AI share. According to an Investing.com summary, JPMorgan’s primary research indicates: [5]
- Marvell’s ASIC programs at both Microsoft and AWS are progressing as planned, with no share loss in current or next‑gen AI XPU programs.
- Microsoft’s Maia 3‑nanometer AI XPU program with Marvell remains on track for first deployment in the second half of 2026, with volume shipments expected in 2027, and a next‑generation Maia program using 2nm/3nm chiplet designs already in early work.
- At AWS, Marvell has completed design and qualification of the next‑generation Trainium 3 AI XPU, with purchase orders in hand covering all of 2026, which management cited when lifting its AI custom‑ASIC growth outlook for next year.
The same report notes that other firms have also raised their targets on Marvell recently: Piper Sandler to $135, Benchmark (before today’s downgrade) to $130, TD Cowen to $100 (Hold), and Cantor Fitzgerald to $110 (Neutral). [6]
In short, today’s sell‑off is being driven by a clash of interpretations: one camp sees Microsoft and AWS risk as thesis‑changing; another sees the headlines as noise against a still‑intact, multi‑year AI custom‑chip pipeline.
Q3 FY 2026: Record Results Powered by AI Data Centers
Today’s drama comes just six days after Marvell reported one of the strongest quarters in its history.
For its fiscal third quarter 2026 (reported December 2, 2025), Marvell announced: [7]
- Revenue: $2.075 billion, a new record, up 37% year‑on‑year, slightly above the midpoint of guidance.
- GAAP gross margin: 51.6%; non‑GAAP gross margin: 59.7%.
- Non‑GAAP net income: $655 million, with non‑GAAP EPS of $0.76, up sharply from $0.43 a year ago.
- GAAP net income: $1.901 billion, boosted by a gain from the sale of the automotive Ethernet business.
- Data center revenue (per Futurum’s breakdown) of roughly $1.5 billion, up about 38% YoY, with strong contributions from AI‑driven custom silicon and optics.
Management guided for Q4 FY26 revenue of about $2.2 billion (±5%) and forecast full‑year revenue growth above 40%, with data‑center revenue growth next year now expected to outpace prior expectations. [8]
An analysis from Futurum Research framed the quarter as evidence of “accelerating AI‑infrastructure demand”, highlighting: [9]
- Improved order visibility across custom silicon.
- A plan for sequential revenue growth every quarter next year.
- A roadmap that could take Marvell’s data‑center revenue towards ~$10 billion by FY 2027 on an organic basis, with photonics and custom XPUs as major drivers.
All of that is why today’s downgrade headlines are so jarring: they directly challenge the optimistic AI narrative Marvell presented less than a week ago.
Celestial AI Acquisition: A Big Bet on Optical Fabric Inside the Data Center
Alongside earnings, Marvell unveiled a transformational deal: the acquisition of Celestial AI, a private company focused on photonic interconnects for AI data centers.
According to Marvell’s December 2 press release, the company has agreed to acquire Celestial AI for about $3.25 billion (roughly $1 billion in cash and $2.25 billion in stock), with additional contingent stock of up to $2.25 billion tied to revenue milestones through FY 2029. [10]
Key strategic points from Marvell’s and third‑party analysis: [11]
- Celestial AI’s Photonic Fabric technology is designed for scale‑up optical interconnects, linking hundreds of XPUs within and across racks with very high bandwidth and low latency.
- The technology enables an all‑optical fabric with more than 16 Tb/s of bandwidth per chiplet, significantly exceeding today’s copper‑based solutions.
- Marvell expects Celestial AI to begin contributing meaningful revenue in the second half of FY 2028, reaching around $500 million annualized run‑rate by Q4 FY 2028, and $1 billion by Q4 FY 2029.
- The company cites deep engagement with multiple hyperscalers, including AWS, which publicly endorsed the role optical interconnects will play in future AI infrastructure.
Futurum’s note emphasizes that combining Celestial AI’s photonics with Marvell’s established Inphi‑based optical portfolio and switching silicon places the company at the center of a broader shift to “photonics inside the data center”—a potential new multi‑billion‑dollar addressable market. [12]
This acquisition is a crucial backdrop for today’s sell‑off: even if some hyperscaler projects wobble at the margin, Marvell is clearly gearing up to be a platform vendor for AI connectivity, not just a single‑socket custom chip player.
AI Strategy and the Custom XPU Pipeline
Marvell’s broader AI strategy is to position itself as the infrastructure layer for hyperscale AI—connecting, accelerating, and enabling whatever compute engines its customers choose.
A recent deep dive from The Next Platform describes how Marvell’s custom XPU business has evolved into a major growth engine: [13]
- Marvell has been shepherding AWS Trainium 2 into production and helping ramp Trainium 3, while also aiding development of future Trainium 4.
- It is widely believed to be deeply involved in Microsoft’s Maia AI XPU programs as well.
- The company has 18 different custom sockets under development and a pipeline of 50+ opportunities, which it estimates could translate into tens of billions of dollars of lifetime revenue.
- Marvell now believes it can grow its data‑center business from around $4 billion in 2024 to nearly $19 billion in 2028, implying a compound annual growth rate in the mid‑30% range.
On its own AI site, Marvell also highlights its role in custom cloud AI infrastructure, emphasizing custom accelerators (ASICs), high‑speed interconnects, and switches that let hyperscalers tailor compute to their own workloads rather than relying solely on off‑the‑shelf GPUs. [14]
This context explains why the market reacts so strongly to any rumor about Microsoft or AWS switching chip partners: a handful of hyperscale clients account for the lion’s share of Marvell’s AI growth runway.
Wall Street View: Marvell Stock Forecast and Analyst Targets
Despite today’s volatility, most published forecasts remain constructive on MRVL.
Consensus rating: “Moderate Buy”
MarketBeat’s latest compilation of 38 Wall Street analyst ratings shows: [15]
- Consensus rating: Moderate Buy
- Breakdown: 0 Sell, 15 Hold, 20 Buy, 3 Strong Buy
- Average 12‑month price target:$111.56, with a range from $66 to $156
- From a current price near $90, that average implies about 24% upside.
Over the past 90 days, MarketBeat counts four upgrades vs. two downgrades across the analyst community, underscoring that while skepticism exists, the balance of opinion is still positive. [16]
Fintel/Nasdaq: Targets drifting higher
Fintel data relayed via Nasdaq shows the average one‑year target recently increased by 26%, from $91.65 to about $115.89. That average was calculated off a prior closing price of $98.85, implying roughly 17% upside at that time. The target range in that dataset runs from about $58.78 to $163.80 per share. [17]
The same report notes that more than 2,100 institutional investors hold MRVL, with overall institutional share count down modestly last quarter, and an options put/call ratio of about 1.21, suggesting somewhat cautious options positioning. [18]
Individual price targets: Triple‑digit cluster
Quiver Quantitative’s summary of recent research lists 27 analysts with price targets in the last six months and a median target of $120. Recent examples include: [19]
- Citigroup: $114 (Buy)
- Rosenblatt: $120 (Buy)
- Susquehanna: $120 (Positive)
- Roth Capital: $135
- B. Riley: $130
- Jefferies: $120 (after a boost from $80)
JPMorgan, as noted, sits at $130 with an Overweight rating, and other firms such as Piper Sandler and Cantor Fitzgerald are also in the triple‑digit camp, albeit with varying levels of enthusiasm. [20]
Not all sunshine: Benchmark and other concerns
On the bearish side:
- Benchmark has now moved to Hold, removed its target, and is emphasizing risk around AWS Trainium design wins. [21]
- MarketBeat flags low insider ownership (~0.19%) as a potential governance overhang, even though there has been some recent insider buying. [22]
Taken together, the analyst landscape looks like this: most see meaningful upside, but a minority is increasingly worried that competition for hyperscaler AI sockets (Broadcom, Alchip, others) could erode Marvell’s growth trajectory if it stumbles on key programs.
Amazon’s AI Push: A Double‑Edged Sword for Marvell
Amazon’s AWS re:Invent 2025 event is another important part of today’s story.
A Bank of America note highlighted by Business Insider singles out Marvell as one of five chip stocks poised to benefit from Amazon’s latest AI push, alongside Nvidia, Astera Labs, AMD, and Credo. BofA views AWS’s expanded AI roadmap as evidence that the AI trade is not in a bubble yet, and it likes Marvell specifically for its data‑center networking portfolio and connectivity components that underpin AI infrastructure. [23]
Yet, Amazon is also at the heart of the Benchmark downgrade and Barron’s “biggest loser from Amazon’s new chip” framing, which argue that Marvell has lost future Trainium AI designs to Alchip. [24]
This creates a paradoxical narrative:
- On one side, AI infrastructure demand from AWS (and its Nvidia partnership) is booming, and Marvell’s networking and optical products are clear beneficiaries.
- On the other, there is genuine confusion over how much of the incremental AI silicon attached to that infrastructure — especially Trainium 3 and 4 — will flow through Marvell’s custom XPU pipeline versus competitors.
JPMorgan’s assertion that Marvell has purchase orders in hand for Trainium 3 throughout 2026 is designed to calm that fear, but skeptics won’t be fully convinced until more hard evidence appears in revenue and backlog numbers. [25]
How Today’s Move Fits Into the Bigger Picture
For investors and readers trying to make sense of the December 8 sell‑off, it helps to separate short‑term headline risk from long‑term structural drivers.
Short‑term pressure points
- Headline risk from Microsoft and Broadcom: Even if some of this ultimately proves to be negotiation posturing or partial share shifts rather than a full exit, it injects uncertainty into Marvell’s medium‑term AI revenue models. [26]
- AWS design win confusion: Conflicting messages from different analysts about Trainium 3/4 make it harder for investors to model Marvell’s AI XPU trajectory beyond 2026. [27]
- Valuation and expectations: After a strong post‑earnings rally and big target hikes, any hint of hyperscaler risk is more likely to trigger an outsized reaction. [28]
Long‑term supports
- Record AI‑driven earnings and robust guidance, with management talking about >40% full‑year revenue growth and stronger data‑center growth next year. [29]
- A deep custom XPU and optics pipeline with 18 sockets in development and a TAM that Marvell believes can drive data‑center revenue from ~$4B to nearly $19B in about five years. [30]
- Celestial AI’s optical fabric acquisition, which positions Marvell for the transition from copper to optical scale‑up fabrics inside AI clusters and opens up a potential $1B+ revenue stream late in the decade. [31]
- Broad analyst support, with most major houses still in the Buy/Overweight camp and average targets well above current levels. [32]
What to Watch Next
For anyone tracking MRVL — whether as an investor, trader, or industry observer — the next few months will likely hinge on a handful of catalysts:
- Clarification on Microsoft and AWS roadmaps
- Future commentary from Microsoft, AWS, and Marvell about Maia and Trainium programs will be crucial in validating or refuting fears of share loss. [33]
- Regulatory and shareholder approvals for Celestial AI
- Progress on closing the Celestial AI deal, plus any incremental detail on customer traction and design wins, will shape how much value investors ascribe to the optical‑fabric story. [34]
- Next earnings and guidance updates
- Investors will be looking for confirmation that data‑center revenue is continuing to grow sequentially and that full‑year and multi‑year outlooks (e.g., toward FY 2027/2028) remain intact. [35]
- Shifts in analyst sentiment
- Additional downgrades in the wake of Benchmark’s move could weigh on the stock, while reaffirmations like JPMorgan’s may help stabilize sentiment. Watch changes in consensus targets, not just individual headlines. [36]
Bottom Line (and a Quick Disclaimer)
As of December 8, 2025, Marvell Technology sits at a crossroads:
- The bear side points to concentrated hyperscaler risk, potential loss (or at least dilution) of key AI design wins, intense competition from Broadcom, Alchip, and others, plus rich expectations embedded in consensus targets.
- The bull side leans on record AI‑driven results, a deepening custom XPU and optics pipeline, the Celestial AI acquisition, and a still‑supportive analyst community that largely sees double‑digit upside from here.
Which story wins will depend less on today’s headlines and more on whether Marvell can keep proving, quarter after quarter, that its AI infrastructure roadmap is converting into durable, diversified revenue — and that its relationships with Microsoft, AWS, and other hyperscalers remain as strong as management and many bulls claim.
This article is for informational purposes only and does not constitute investment, tax, or financial advice. Always do your own research or consult a licensed financial advisor before making investment decisions.
References
1. www.investors.com, 2. www.marketbeat.com, 3. www.investors.com, 4. www.barrons.com, 5. www.investors.com, 6. www.investing.com, 7. investor.marvell.com, 8. investor.marvell.com, 9. futurumgroup.com, 10. investor.marvell.com, 11. investor.marvell.com, 12. futurumgroup.com, 13. www.nextplatform.com, 14. www.marvell.com, 15. www.marketbeat.com, 16. www.marketbeat.com, 17. www.nasdaq.com, 18. www.nasdaq.com, 19. www.quiverquant.com, 20. www.investing.com, 21. www.barrons.com, 22. www.marketbeat.com, 23. www.businessinsider.com, 24. www.barrons.com, 25. www.investing.com, 26. www.investors.com, 27. www.tipranks.com, 28. www.nasdaq.com, 29. investor.marvell.com, 30. www.nextplatform.com, 31. investor.marvell.com, 32. www.marketbeat.com, 33. www.investing.com, 34. investor.marvell.com, 35. futurumgroup.com, 36. www.tipranks.com
