Why Marvell's Optics Play Matters for AI Infrastructure

As AI models get hungrier for bandwidth, copper cables are hitting the ceiling. Marvell Technology (MRVL) is stepping up with co-packaged optics—basically embedding optical components directly into switching chips to cut power consumption and latency.

Here’s the kicker: MRVL’s latest 800G and 1.6T modules use fiber instead of copper, enabling faster data transmission while slashing power draw compared to traditional setups. Their Silicon Photonics Light Engines can hit speeds up to 6.4T—perfect for hyperscale AI data centers scaling massive workloads.

The numbers backing it up:

• Q2 FY2026 revenue jumped 57.6% YoY
• Consensus estimate for FY2026: $8.11B revenue (41% YoY growth)
• Optics segment expected to grow double digits next quarter

But MRVL’s facing stiff competition from Broadcom and Coherent, both aggressively pushing high-speed optics for AI networks. Meanwhile, MRVL stock is down 24.5% YTD while the semiconductor industry gained 35.8%—trading at a 7.91X forward P/S ratio, slightly above industry average.

Valuation’s stretched, but earnings estimates for FY2026-2027 suggest 80% and 18% YoY growth respectively. Currently rated Zacks Rank #3 (Hold).