Marvell Gains 33% After Nvidia’s $2B Investment and ‘Trillion-Dollar’ Nod
MRVL•Marvell shares jumped 33%, adding $62.4 billion to its market cap after Nvidia CEO Jensen Huang dubbed it the “next trillion-dollar company” at Computex. Nvidia’s $2 billion March investment and Marvell’s $1.83 billion data center revenue boost the case for its new Teralynx 100 AI switch chip, despite a P/E above 90.
1. Stock Surge and Market Capitalization
On Tuesday, Marvell shares vaulted 33%, adding $62.42 billion to its market cap, which climbed to $254.38 billion following Jensen Huang’s onstage endorsement at Computex. The rally extended a premarket 15% gain after investors seized on the Nvidia CEO’s “next trillion-dollar company” comment.
2. Nvidia Partnership and AI Strategy
Nvidia invested $2 billion in Marvell in March for integration of Marvell’s custom AI chips, networking gear, and silicon photonics into Nvidia’s NVLink Fusion ecosystem. This deeper partnership underpins Marvell’s launch of the Teralynx 100 switch chip and its ambition to capture a larger share of AI infrastructure demand.
3. Financial Metrics and Valuation
Marvell’s data center revenue reached $1.83 billion, representing 76% of total revenue, reflecting strong demand for its ASIC solutions. However, its premium valuation, with a P/E ratio exceeding 90, signals high growth expectations and raises questions about sustainability.
4. Market Sentiment and Risks
Retail sentiment on social platforms hit an “extremely bullish” 96/100 reading as traders speculated on further gains, though some warned of a potential pullback after rapid gains. With a reported 15%-20% share of the ASIC market, Marvell must balance soaring expectations against execution risks.
