Citi: Marvell Raises Revenue Guidance for Second Consecutive Quarter, Google XPU-Attach Agreement Opens Long-Term Upside

Citi's August 28 research report noted that Marvell raised its full-year revenue guidance for the second consecutive quarter, lifting FY2027 from $11.5 billion to approximately $12.0 billion and FY2028 from $16.5 billion to approximately $18.0 billion. Management expects data center revenue to grow over 60% in both FY2027 and FY2028. Second-quarter revenue came in at $2.74 billion with non-GAAP EPS of $0.94; third-quarter revenue guidance midpoint is $3.15 billion, up 15% quarter-over-quarter and 52% year-over-year, above the market consensus of $3.0 billion.

Citi maintains a Buy rating with a target price of $275, based on 28x CY2028 estimated P/E. Citi believes Marvell is evolving from an AI connectivity chip company into a custom computing platform company. The expanded agreement signed with Google in July covers AI inference accelerators, storage controllers, NICs, memory interface controllers, and near-memory computing, falling under the XPU-attach category rather than a single project.

Citi estimates FY2027/FY2028 AI data center DSP sales of $5.3 billion/$7.7 billion respectively, with 1.6T DSP ramping strongly in the second half of 2026 and 3.2T DSP beginning shipments in 2027. The CPO/NPO optical business has secured additional design wins, with management describing the opportunity as "tremendous." The October 6 investor day will provide a full strategic update.

[TechFlow]