Benchmark on Monday reiterated its Hold rating for Marvell (NASDAQ:MRVL), whose market capitalization sits at approximately $64 billion, after the company confirmed it had closed its previously announced purchase of Celestial AI. Celestial AI supplies optical interconnect technology intended for scale-up connectivity, and Marvell said it will integrate that capability into its broader product set.
InvestingPro data cited alongside the announcement lists Marvell with a "GOOD" overall financial health score and identifies it as a significant participant in the Semiconductors industry.
Management has been explicit that the Celestial AI acquisition will not immediately translate into material revenue. Initial sales tied to the deal are forecast to begin in the second half of fiscal 2028, with management anticipating a modest contribution in the third quarter of that fiscal year.
Marvell's own projections indicate a stepped revenue ramp from the Celestial AI assets: the company expects the contribution to reach $125 million in the fourth quarter of fiscal 2028, equivalent to a $500 million annualized run-rate. Marvell projects that, at this level of contribution, the additional revenue should fully offset the dilutive effects associated with higher operating expenses, reduced interest income, and dilution from an increased share count.
Looking further ahead, Marvell forecasts continued growth from Celestial AI throughout fiscal 2029, exiting that fiscal fourth quarter at $250 million in quarterly revenue, or a $1 billion annualized run-rate. Those company projections sit alongside InvestingPro data noting Marvell delivered 45% revenue growth over the last twelve months, and that analysts expect sales to continue expanding in the current year.
Following the acquisition announcement, Benchmark left its fiscal 2027 revenue expectations for Marvell unchanged. Separately, InvestingPro analysis shows Marvell trading at $74.97 with a price-to-earnings ratio of 27.45, and an analyst consensus rating of 1.69 on a scale where 1 equals Strong Buy, a metric some observers use to assess market expectations.
Operationally, Marvell said it has already integrated Celestial AI's Photonic Fabric optical interconnect technology to strengthen its high-bandwidth, low-latency solutions aimed at AI and cloud data center customers. Company statements indicate this is a strategic enhancement to Marvell's existing data center capabilities.
The company has also disclosed plans to acquire XConn Technologies for approximately $540 million. That transaction, which Marvell says is intended to broaden its switching portfolio by adding XConn's PCIe and CXL products, will be financed with a combination of cash and stock and is expected to close in early 2026, subject to regulatory approvals.
Market responses have varied among analysts. RBC Capital initiated coverage on Marvell with an Outperform rating, citing firm orders for AWS Trainium3 chips and the potential for Marvell to supply Trainium4 in the future. Raymond James subsequently reiterated a Strong Buy rating and set a $125.00 price target after the XConn announcement.
While the company outlines a clear multi-year revenue ramp tied to Celestial AI, current expectations from Benchmark show no immediate change to near-term revenue guidance. Investors and observers will be watching the stated fiscal 2028 and fiscal 2029 milestones closely as the integration and commercialization of Celestial AI technologies proceed.