Marvell Technology's AI revenue is rising, but margin pressure is mounting due to higher costs

Marvell Technology’s top line is growing with custom AI silicon chips, but gross margin trends are inconsistent. Custom AI XPUs, electro-optics solutions, and high bandwidth memory chips are driving growth, but higher costs impact margins. Non-GAAP gross margin declined in Q1 FY26, with projected lower margins for Q2 FY26.

Competitive pressure from Broadcom and Advanced Micro Devices challenges Marvell. Broadcom’s 3.5D XDSiP platform enhances custom AI XPU performance. AMD’s custom silicon solutions power data centers. Marvell’s stock has declined 32.2% YTD, with a lower forward P/S ratio than the industry average.

Marvell’s fiscal 2026 and 2027 earnings estimates show significant growth. The company carries a Zacks Rank #3 (Hold). For potential investment opportunities, Zacks experts recommend five stocks set to double in the coming year. These stocks offer high growth potential under the radar of Wall Street analysts.

Read more at Nasdaq: MRVL’s Margin Pressure Mounts as AI Revenues Rise: Is it Sustainable?