Marvell Data Center Now 75% of Revenue, Eyes Fiscal 2027 Custom XPU Growth
AVGO•Marvell’s data center segment grew to 75% of total revenue by early 2025, driving a 21.6% trailing-twelve-month revenue growth in Q1 fiscal 2026, more than double its three-year average. Management has secured three-nanometer wafer capacity and forecast multi-year growth for its custom XPU program starting in fiscal 2027.
1. Hidden AI Roadmap
Management signaled a shift to an AI-first data center semiconductor model in December 2024’s Q3 FY2025 call, reorganizing the company structure to sharpen focus on high-performance data center chips. This early roadmap laid the groundwork for subsequent revenue expansion and underappreciated the magnitude of the AI strategy.
2. Data Center Transformation and Financials
By early 2025 the data center segment swelled to 75% of total revenue, fueling a trailing-twelve-month revenue growth rate of 21.6% in Q1 fiscal 2026, more than double the three-year average of 9.3%. These figures illustrated the rapid transformation before the broader market responded.
3. Multi-year Custom XPU Guidance
On the Q4 FY2025 call, executives provided multi-year visibility for a key custom XPU program, projecting revenue growth in fiscal 2027 and beyond. They later confirmed secured three-nanometer wafer and advanced packaging capacity, signaling readiness for high-volume AI silicon production.
4. Market Focus on Short-Term Momentum
Despite strong year-over-year gains, sequential guidance for Q2 fiscal 2026 implied only mid-single-digit growth, which led many investors to overlook the long-term AI roadmap. Options-market volatility also eased, reflecting a focus on near-term momentum rather than the extended custom chip strategy.
