Marvell just made a move that changes the AI networking story

· The Fresno Bee

Anyone who has bought a faster laptop, then watched a video freeze on weak Wi-Fi, knows the lesson. Speed means little if the connection can’t keep up. AI data centers are relearning it, with a far bigger power bill.

That is the backdrop for Marvell Technology Inc. (MRVL) at ECOC 2026, an optics conference in Málaga, Spain. The company is showing what it calls the first optical networking chips built on a 2-nanometer process, according to a press release.

These include signal processors inside optical transceivers, the modules that turn electrical signals into light and back.

The venue carries some irony. At last year’s ECOC, research from Meta showed co-packaged optics used about 65% less power than a comparable pluggable module, according to SemiAnalysis.

Co-packaged designs mount the optics beside the switch chip, sidelining the kind of module signal processor Marvell is promoting.

Marvell’s answer is to play both sides. It is shrinking its pluggable signal processors to 2nm to cut power, while demonstrating a 102.4-terabit co-packaged optics platform, the release said.

The AI networking story has been about speed, and Marvell is betting its next chapter is about watts.

The “industry first” claim comes with a caveat

Broadcom (AVGO) billed its own 3nm signal processor as the industry’s first to carry 400 gigabits per lane when it launched in March, according to its press release. Marvell’s claim rests on reaching 2nm first, not on reaching that speed first.

That lead matters because design wins tend to persist once transceiver makers qualify a chip, the Futurum Group wrote in March. Marvell is betting 2nm lets it win on power efficiency instead.

Research firm LightCounting expects more than 100 million transceivers in the 1.6-terabit and 3.2-terabit classes to ship over five years, with close to half using 400G optics, SDxCentral reported.

That is the pool Marvell and Broadcom are fighting over.

JHVEPhoto / Getty Images

A Vermont deal hedges Marvell’s optics bet

The quieter move came four days earlier. On Thursday, September 17, Marvell and GlobalFoundries expanded a multi-year deal for silicon germanium capacity at a plant in Burlington, Vermont, Reuters reported. GlobalFoundries markets that process for the amplifiers and drivers inside data center optical links.

The added output will serve pluggable, near-packaged and co-packaged optics alike, according to a GlobalFoundries press release. That part of Marvell’s optics business gets paid whichever design wins.

Marvell executives said on the August 27 earnings call that this amplifier and driver business is on or ahead of pace toward a $1 billion annual run rate, according to a transcript.

It rarely makes headlines, yet it may prove more durable than the chips shown in Málaga.

Marvell shares rose as Wall Street eyes October 6

Marvell designs chips that move, store and secure data for cloud providers, carriers and enterprises.

Data center revenue rose 46% last quarter and lifted total sales to a record $2.74 billion, according to its second-quarter results. That makes the stock a direct bet on AI infrastructure spending.

Shares rose 2.4% in premarket trading on Monday, September 21, Seeking Alpha reported. Benzinga tied the early gain to a broader tech rally, a sign the demos were not the only driver.

The stock opened at $251.40, above Sept. 18’s $244.25 close, and traded near $250.66 by 10:13 a.m. ET, according to StockAnalysis.

That still leaves shares roughly 24% below their 52-week high of $329.88, the same data shows.

More Marvell:

Of 45 analysts tracked by StockAnalysis, 40 rate Marvell a buy or strong buy and none say sell. Their average target of $289.04 implies about 15% upside, though the same data puts shares near 46 times forward earnings.

Morgan Stanley raised its target to $268 from $246 that morning but kept a neutral Equal Weight rating, TheFly reported. The firm thinks Marvell could use its October 6 Investor Day to frame fiscal 2030 revenue above $40 billion. That is more than triple the roughly $12 billion expected this fiscal year, per StockAnalysis.

Power budgets will pick the next AI chip winners

Big Tech capital spending could top $1 trillion in 2027, according to Evercore and Bank of America estimates cited by CNBC. Each new data center runs on a fixed power budget, so every watt the network saves is a watt left for AI processors.

That makes Investor Day the next test. Marvell’s earlier framework called for about $300 million in fiscal 2028 scale-up optics revenue, an opportunity management said in August is now meaningfully larger, per the transcript.

A fresh figure would show how much of its future rides on near-packaged and co-packaged optics.

For two years, the AI trade rewarded companies that built the fastest processors. The next phase may reward those that waste the least energy moving data between them, and Marvell is positioned to collect either way.

Related: Marvell’s $120B AI deal came with an unexpected catch

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This story was originally published September 21, 2026 at 10:33 AM.