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Marvell Lands Microsoft Azure Security Deal as AI Chip Revenue Eyes $4 Billion

MarketDash Editorial Team
7 days ago
Marvell's hardware security modules are now powering Microsoft Azure across Europe, adding to deployments in Asia and North America. The win comes as analysts project the company's AI-related revenue could more than double to $4 billion in 2025.

Marvell Technology, Inc. (MRVL) is making headway with Microsoft Corp (MSFT), and not just on the AI chip front. The semiconductor maker announced that Microsoft has expanded its use of Marvell's LiquidSecurity hardware security modules across Azure's European operations, building on existing deployments in Asia and North America.

Think of hardware security modules as the digital vaults of cloud computing—they handle encryption keys and secure sensitive transactions. For Microsoft Azure, this means customers can now access cloud-based services for cross-border contract certification, ID verification, and other secure transactions with less time, cost, and operational hassle.

Security Credentials Open Doors

The European expansion follows Marvell's success in earning eIDAS and Common Criteria EAL4+ certifications earlier this year—regulatory stamps of approval that matter when you're handling sensitive data across borders. Marvell's PCIe-based HSMs, powered by OCTEON DPUs, deliver secure, low-power, and space-efficient encryption services that fit neatly into cloud infrastructure.

The AI Chip Story That Really Matters

While the security win is nice, investors are really watching Marvell's custom AI chip business. The stock has dropped more than 18% year-to-date as concerns swirled about delays in custom AI chip projects with hyperscalers like Microsoft and Amazon, plus weakness in consumer and industrial segments outside the data center world.

But JPMorgan analyst Harlan Sur sees a different picture emerging. He expects Marvell to more than double its AI-related revenue to $4 billion in 2025, with further acceleration coming in 2026. That's a big jump, and it's based on real progress: Amazon's Trainium 3 chip at 3nm process technology and Microsoft's MAIA Gen 3 at 2nm/3nm chiplet architecture are both moving forward, plus Marvell has secured multiple 2nm design wins for future products.

Near-Term Outlook and Moving Parts

Sur projects July-quarter revenue around $2.05 billion, driven by strong demand for AI chips and optical DSPs. For the October quarter, he's looking at guidance near $2.1 billion, running slightly below consensus partly because of the automotive Ethernet business sale. But here's the interesting bit: that divestiture could eventually boost earnings by $0.05 to $0.10 per share if Marvell uses the proceeds to fund share buybacks.

There's also robust demand for Marvell's 800G PAM4 optical DSPs, which support infrastructure builds at Nvidia Corp (NVDA) and Alphabet Inc (GOOGL). These components help move massive amounts of data around AI data centers—unglamorous but essential plumbing for the AI boom.

Market Reaction

Investors seemed to like the combination of news. Marvell stock traded 2.02% higher at $91.32 on Monday, suggesting the market is starting to look past near-term concerns and focus on that projected AI revenue ramp. When you're staring at a potential doubling of AI-related revenue, a security module win with Microsoft Azure starts to look like another piece of a bigger puzzle coming together.

Back to News

Marvell Lands Microsoft Azure Security Deal as AI Chip Revenue Eyes $4 Billion

MarketDash Editorial Team
7 days ago
Marvell's hardware security modules are now powering Microsoft Azure across Europe, adding to deployments in Asia and North America. The win comes as analysts project the company's AI-related revenue could more than double to $4 billion in 2025.

Marvell Technology, Inc. (MRVL) is making headway with Microsoft Corp (MSFT), and not just on the AI chip front. The semiconductor maker announced that Microsoft has expanded its use of Marvell's LiquidSecurity hardware security modules across Azure's European operations, building on existing deployments in Asia and North America.

Think of hardware security modules as the digital vaults of cloud computing—they handle encryption keys and secure sensitive transactions. For Microsoft Azure, this means customers can now access cloud-based services for cross-border contract certification, ID verification, and other secure transactions with less time, cost, and operational hassle.

Security Credentials Open Doors

The European expansion follows Marvell's success in earning eIDAS and Common Criteria EAL4+ certifications earlier this year—regulatory stamps of approval that matter when you're handling sensitive data across borders. Marvell's PCIe-based HSMs, powered by OCTEON DPUs, deliver secure, low-power, and space-efficient encryption services that fit neatly into cloud infrastructure.

The AI Chip Story That Really Matters

While the security win is nice, investors are really watching Marvell's custom AI chip business. The stock has dropped more than 18% year-to-date as concerns swirled about delays in custom AI chip projects with hyperscalers like Microsoft and Amazon, plus weakness in consumer and industrial segments outside the data center world.

But JPMorgan analyst Harlan Sur sees a different picture emerging. He expects Marvell to more than double its AI-related revenue to $4 billion in 2025, with further acceleration coming in 2026. That's a big jump, and it's based on real progress: Amazon's Trainium 3 chip at 3nm process technology and Microsoft's MAIA Gen 3 at 2nm/3nm chiplet architecture are both moving forward, plus Marvell has secured multiple 2nm design wins for future products.

Near-Term Outlook and Moving Parts

Sur projects July-quarter revenue around $2.05 billion, driven by strong demand for AI chips and optical DSPs. For the October quarter, he's looking at guidance near $2.1 billion, running slightly below consensus partly because of the automotive Ethernet business sale. But here's the interesting bit: that divestiture could eventually boost earnings by $0.05 to $0.10 per share if Marvell uses the proceeds to fund share buybacks.

There's also robust demand for Marvell's 800G PAM4 optical DSPs, which support infrastructure builds at Nvidia Corp (NVDA) and Alphabet Inc (GOOGL). These components help move massive amounts of data around AI data centers—unglamorous but essential plumbing for the AI boom.

Market Reaction

Investors seemed to like the combination of news. Marvell stock traded 2.02% higher at $91.32 on Monday, suggesting the market is starting to look past near-term concerns and focus on that projected AI revenue ramp. When you're staring at a potential doubling of AI-related revenue, a security module win with Microsoft Azure starts to look like another piece of a bigger puzzle coming together.