Meet the Small AI Chip Maker Now Worth More Than Intel

Matt Murphy, CEO of Marvell Technology since 2016, isn’t interested in leading a semiconductor company ten times the size of his current one. His decision reflects both a practical and ambitious approach. Recently, his name surfaced as a potential successor to Pat Gelsinger, who was ousted as CEO of Intel. This speculation prompted Murphy to make an unusual move—publicly addressing the rumors during Marvell’s quarterly earnings call.

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“I am all in,” Murphy declared on the December 3 call, which coincided with Intel’s announcement of Gelsinger’s departure. “The company is outstanding. The technology is best-in-class. I can’t think of a better place to work than Marvell.”

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His remarks came as Marvell reported strong earnings and unveiled an expanded partnership with Amazon, fueling a stock surge that had already gained 60% earlier in the year. Following the report, Marvell’s shares jumped an additional 18%, briefly pushing its market capitalization above $100 billion—a remarkable increase from the $5 billion valuation when Murphy took the helm.

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Marvell’s ascent has even positioned its market capitalization ahead of Intel’s, despite the latter generating ten times Marvell’s annual revenue. However, Marvell’s trajectory suggests this revenue gap could shrink further. The company’s explosive growth in its data center business has offset declines in its legacy segments, which include chips for telecommunications equipment, cable TV boxes, and automobiles.

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In the most recent quarter, Marvell’s data center sales nearly doubled year-over-year, reaching $1.1 billion. The company projects that by the fiscal year ending in January, its data center division will account for about 72% of total revenue, up from 40% a year prior. This rapid expansion reflects Marvell’s increasing focus on cutting-edge markets, particularly artificial intelligence (AI).

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Marvell’s future looks promising, bolstered by a new five-year agreement with Amazon. This “multigenerational” deal involves Marvell collaborating with Amazon to design custom AI chips. Amazon, a leader in cloud computing, has ramped up its in-house chip development efforts to reduce reliance on Nvidia for critical AI components. At its annual developer conference, Amazon unveiled the next iteration of its Trainium AI chip, which analysts expect to significantly contribute to Marvell’s AI revenue doubling in the fiscal year ending January 2026.

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Consensus estimates from Visible Alpha suggest Marvell’s annual revenue could exceed $8 billion by fiscal 2026, representing a 40% increase over this year’s projections. Analysts also anticipate 20% revenue growth in the subsequent fiscal year, as Marvell prepares to produce custom AI chips for another major tech client, widely believed to be Microsoft. Evercore ISI analyst Mark Lipacis estimates that the custom AI chip market could reach $30 billion to $50 billion by 2030, and he predicts Marvell could capture one-third of that market.

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Despite its strong growth, Marvell faces risks, particularly due to its reliance on booming AI investments. A downturn in AI spending—whether caused by underwhelming adoption of AI services or a temporary pause by big tech firms to integrate existing equipment—could pose challenges. Such “digestion” periods are common in the data center market and could impact Marvell’s performance. Furthermore, with the stock trading at nearly 45 times forward earnings—a premium even to Nvidia—investors may react sharply to any disruptions.

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Murphy remains unfazed. In an interview, he acknowledged that fluctuations in spending are inevitable. “We’ll see digestion at some point,” he said, adding that AI is just one component driving demand for accelerated computing systems. With 30 years of experience in the semiconductor industry, Murphy is no stranger to the cyclical nature of the business. “We know it’s not going to be a straight line over the next 10 years,” he remarked.

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AI-driven growth remains a cornerstone of Marvell’s strategy. The company’s data center focus and custom chip collaborations with industry giants like Amazon and potentially Microsoft highlight its commitment to staying at the forefront of emerging technologies. By diversifying its portfolio and strengthening partnerships, Marvell has positioned itself as a key player in the evolving semiconductor landscape.

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While the coming years may bring inevitable challenges, Murphy’s leadership and the company’s strategic investments have set the stage for sustained growth. Analysts remain optimistic, citing Marvell’s ability to capture significant market share in the burgeoning AI chip sector. As Murphy himself noted, the next two years will be pivotal, with plenty to keep him occupied as Marvell continues its upward trajectory.

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