Marvell: Microsoft Multisourcing Report Doesn’t Alter Our Conviction in AI Opportunity

Key Morningstar Metrics for Marvell Technology

• Fair Value Estimate: $120.00
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: High

The Information reported that Microsoft MSFT was in talks with Broadcom AVGO to work on a custom artificial intelligence accelerator, potentially creating a dent to Marvell Technology’s MRVL upcoming revenue from designing Microsoft’s Maia chip. Marvell shares fell 10% intraday on Dec. 8.

Why it matters: This is the latest fuel for ongoing market doubt over Marvell’s competency in custom AI chips, which has led to volatile stock performance throughout 2025. We retain our confidence in Marvell’s design prowess, and we see this as natural multisourcing rather than competitive weakness.

• Our valuation is not contingent on Marvell being sole-sourced in Microsoft’s Maia chip in the long term. We expect strong unit growth for both firms if Broadcom comes in as a second supplier. This would take two years, so this doesn’t impact our Maia revenue forecast through calendar 2027.
• In the long term, Marvell’s AI chip business is diversified, with six total design wins thus far, strong leadership in optical connectivity, and many other data center sockets to service, bolstered by the recent Celestial deal. Microsoft is a big customer but not Marvell’s end-all, be-all.

The bottom line: We maintain our $120 fair value estimate for narrow-moat Marvell. We don’t see a material medium-term impact from the news, and in the longer term, this fits our multisourcing expectations. We see shares as attractive, given a robust and diversified AI opportunity ahead.

• We don’t expect the next two years of revenue to be affected, which management has guided to bullishly. We continue to expect strong custom chip revenue growth, including the business doubling in fiscal 2028 (calendar 2027) behind the ramp of Microsoft’s Maia chip.
• For the longer term, our revenue forecast for Marvell is diversified across multiple custom chip opportunities and a broad and strong connectivity chip portfolio in the data center. We would still expect revenue growth from Microsoft, even if it slows down with Broadcom taking share.