Marvell Technology, Inc. (MRVL) is riding a wave of AI-driven momentum that shows no signs of slowing down, according to JPMorgan analyst Harlan Sur, who maintains an Overweight rating on the stock.

AI Demand Shows No Signs of Cooling

During a fireside chat with Chairman and CEO Matt Murphy and Senior Vice President of Investor Relations Ashish Saran, Sur got an earful of optimism. Murphy didn't mince words when describing the current environment: short-term bookings are "on fire."

This comes at a time when some investors are getting nervous about potential AI spending slowdowns. But Marvell's backlog keeps expanding, and revenue visibility continues to improve. Fourth-quarter bookings stayed robust straight through the holiday period, supporting what management sees as a multi-year data center infrastructure build-out.

The numbers tell the story. Management expects the data center business to grow roughly 25% in calendar 2026, then accelerate to 40% growth in 2027 as new programs come online.

Custom Chips Could Double Revenue in Two Years

The real excitement centers on Marvell's custom AI ASIC business, which is broadening fast and should drive a sharp revenue jump. The company expects AI custom revenues of approximately $1.8 billion in 2026, up 20% year-over-year, before doubling to $3.6 billion in 2027.

Leading the charge is Marvell's partnership with Amazon on Trainium 3, which is tracking toward a $2 billion run rate in the second half. The company is also moving 15 XPU-attach sockets into production and advancing programs with multiple customers. Notably, a third Tier-1 XPU customer, Microsoft, is progressing toward production.

Sur believes more AI training and inference workloads will shift over time to flexible, programmable ASIC architectures, playing right into Marvell's strengths.

Networking Business Firing on All Cylinders

Beyond custom chips, Marvell's networking segment is showing strong momentum. Optical networking revenues are growing faster than overall data center capital expenditures. The company remains on track to generate $500 million in switching silicon revenue this year as new products ramp up, including its 51.2T switch.

Advanced Ethernet cabling and retimers are scaling quickly too, with revenues doubling year-over-year to several hundred million dollars as adoption accelerates and the industry shifts toward PAM-based technologies.

Strategic Acquisitions Expand the Playbook

Marvell continues expanding its portfolio through disciplined M&A. The acquisition of XConn Technologies strengthened scale-up switching and complemented Marvell's PCIe and CXL offerings. Meanwhile, the $5-plus-billion acquisition of Celestial AI deepened customer engagement in photonic fabric technology.

The company has also secured its supply chain by building long-term partnerships and aligning demand forecasts with suppliers, positioning itself to support sustained AI-driven growth.

MRVL Price Action: Marvell shares were down 4.44% at $84.31 at the time of publication on Wednesday.