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Marvell shares are surging despite Q3 (Oct) results and Q4 (Jan) guidance that were largely in line with expectations. Investor enthusiasm is being driven by exceptional Data Center performance, bullish long-term AI commentary, and the announcement that Marvell will acquire Celestial AI, a pioneer in disruptive Photonic Fabric optical interconnect technology.

• MRVEL recently sold its Automotive Ethernet business for $2.5 bln to focus resources on the multiyear AI opportunity; the Celestial AI deal accelerates this shift.
• Interconnects already make up ~50% of Data Center revenue, and Marvell sees optical as essential as copper approaches physical limits in scale-up AI systems.
• Beefing up its interconnects business makes a lot of sense. Recall that its AI interconnect peer, Credo (CRDO), reported massive results/guidance on Monday.
• Q3 Performance: Data Center revenue: $1.52 bln (+38% yr/yr) vs guidance for mid-30s% growth. Strong demand in PAM DSPs, TIAs, drivers, and other optical components; double-digit sequential growth across optical, storage, and switching. Q4 Data Center revenue expected to rise +20% yr/yr.
• Long-Term Outlook: Customers are planning major AI capacity expansions and working with Marvell on long-term road maps. Expected Data Center growth: FY26 +45%, FY27 +25%, FY28 +40%.

Briefing.com Analyst Insight

Marvell's near-term numbers were fine, but this story is all about the acceleration in AI infrastructure spending and Marvell's strategic positioning to capture it. The Celestial AI deal reinforces Marvell's identity not just as a semiconductor company but as a core enabler of AI-scale interconnects, an area already contributing half of its Data Center revenue and now entering a generational technology shift from copper to optical. The long-term growth targets (45% to 25% to 40%) reflect management's confidence in secular AI demand rather than cyclical noise, and the alignment with hyperscale customers on multiyear road maps adds credibility. Investors are correctly focusing on the strategic transformation rather than the in-line quarter. The risk, of course, is execution — integrating Celestial AI, delivering on optical road maps, and meeting aggressive AI cluster build-out expectations. Also, Celestial AI will take some time to make a meaningful revenue impact. But Marvell's momentum and positioning in the interconnect layer give it one of the cleaner AI infrastructure stories in semis right now.