Marvell (MRVL) Stock Soars on $3B Celestial AI Deal & Data Center Forecast

Marvell just lit a rocket under its stock price. The chipmaker's $3 billion acquisition of Celestial AI, paired with a bullish data center forecast, sent investors scrambling.

The AI Hardware Arms Race Heats Up

This isn't just another corporate buyout. It's a strategic land grab in the silicon war for artificial intelligence supremacy. Celestial AI brings optical interconnect technology to the table—a potential game-changer for shuttling vast amounts of data between chips at blistering speeds. Marvell isn't just buying a company; it's buying a shortcut to the future of high-performance computing.

Data Centers: The New Gold Rush

Marvell's crystal ball for data center demand looks exceptionally bright. The forecast signals a massive bet that the infrastructure behind cloud computing and AI isn't just growing—it's fundamentally transforming. Every large language model trained and every AI application deployed flows through these facilities, creating an insatiable appetite for smarter, faster silicon.

The market's reaction was immediate and fierce. A move like this screams confidence, or perhaps desperation, in a sector where missing the next technological wave can mean irrelevance. It's the kind of bold play that gets Wall Street's attention—at least until the next earnings report calls for a reality check. After all, in tech, a $3 billion promise is easier to make than to monetize.

TLDR

• Marvell reported Q3 earnings of 76 cents per share on $2.08 billion revenue, beating analyst expectations
• Data center revenue hit $1.52 billion, up 38% year-over-year, driving the quarter’s performance
• Company acquiring Celestial AI for $3.25 billion in cash and stock to gain photonics technology
• Marvell forecasts data center revenue to grow over 25% next fiscal year, exceeding Wall Street estimates
• Stock jumped 14% after-hours on the bullish forecast, reversing an initial 5% decline

Marvell Technology shares took investors on a wild ride Tuesday evening, initially dropping 5% before rocketing 14% higher once CEO Matt Murphy laid out the company’s growth plans.

Marvell Technology, Inc., MRVL

The chipmaker posted third-quarter adjusted earnings of 76 cents per share on revenue of $2.08 billion. Analysts had expected 74 cents per share on revenue of $2.07 billion.

Data center revenue reached $1.52 billion, growing 38% from last year. The segment makes up most of Marvell’s total sales and came in just above Wall Street’s $1.51 billion estimate.

$MRVL (Marvell Technology) #earnings are out: pic.twitter.com/FjCJcUzsox

— The Earnings Correspondent (@earnings_guy) December 2, 2025

Murphy credited “strong demand for our data center products” for the quarter’s results. The company projected fourth-quarter earnings of 79 cents per share, plus or minus 5 cents, matching analyst forecasts.

Revenue for the current quarter is expected at $2.2 billion, plus or minus 5%. Analysts were looking for $2.18 billion.

The muted guidance initially spooked investors. But Murphy delivered a surprise during the earnings call.

Bullish Data Center Forecast Sparks Rally

“We now expect Marvell’s data center revenue to grow year over year by more than 25% next fiscal year,” Murphy said. That projection blew past what Wall Street had been modeling.

The forecast excludes the pending Celestial AI acquisition. Murphy said the company expects roughly $10 billion in total revenue for next fiscal year.

Shares surged nearly 10% in premarket trading Wednesday, building on the after-hours gains. The stock had been down more than 15% for 2025 before the earnings report.

$3.25 Billion Acquisition Brings Photonics Tech

Marvell announced it will acquire AI startup Celestial AI in a deal valued at $3.25 billion. Celestial shareholders will receive $1 billion in cash and 27.2 million Marvell shares worth $2.25 billion.

The acquisition gives Marvell access to photonics technology. This approach uses light instead of electrical signals to connect AI chips with memory chips.

“We’re going to have a silicon photonics powerhouse at Marvell when this is all done,” Murphy told Reuters. The CEO said the Celestial technology opens a new $10 billion market opportunity.

Big cloud companies plan to install photonics technology in 2027 or 2028 for large-scale applications. Marvell expects meaningful revenue from Celestial starting in the second half of fiscal 2028.

The company projects Celestial will hit $500 million in annualized revenue by Q4 fiscal 2028. That figure should double to $1 billion by Q4 fiscal 2029.

Marvell helps Amazon and Microsoft build custom AI chips, according to JP Morgan analyst Harlan Sur. The company competes with Broadcom and Nvidia in the custom chip space.

As part of the Celestial deal, Marvell issued a warrant to Amazon. The agreement lets Amazon buy up to $90 million worth of Marvell stock, about 1 million shares, based on its purchases of photonic products through 2030.

The exercise price sits at roughly $87. The deal is expected to close in the first quarter of 2026.

Marvell’s custom chip business is projected to grow 20% next year. Murphy said the company doesn’t expect major quarterly swings in custom chip revenue.

UBS analyst Timothy Arcuri rates Marvell as a Buy with a $110 price target. He believes most customers are diversifying their chip suppliers, using multiple GPU and ASIC vendors.