NVIDIA (NASDAQ: NVDA) CEO Jensen Huang is one of the most respected names in the artificial intelligence (AI) industry. As head of the largest AI semiconductor company and working closely with the world’s leading cloud computing companies, he has a unique view of their changing needs.
That’s why investors pay close attention to what Huang has to say. On stage at Computex Week in Taipei, Huang presented Marvel Technology (NASDAQ: MRVL) CEO Matt Murphy, who describes his company’s chips as essential. “That’s why you will be the next trillion-dollar company,” Huang said.
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Marvell stock has skyrocketed since those comments and, as of this writing, has a market capitalization of approximately $278 billion. However, if Huang is right, the stock could nearly quadruple from here.
Is Marvell the next billion-dollar company?
Marvell specializes in optical interconnect chips that transmit data at ultra-high speeds. As Huang said, those chips are essential for optimizing data centers filled with expensive, high-powered GPUs. Ensuring data goes where it needs to be as quickly as possible can provide huge cost savings at the hyperscale level.
To that end, Marvell and Nvidia agreed earlier this year to work closely, using Nvidia’s NVLink platform to optimize chip designs across Marvell’s portfolio. That coincided with Nvidia investing $2 billion of its cash in Marvell stock.
Management raised its outlook for the interconnection business with its first-quarter earnings report last month. It now expects 70% year-on-year growth for the segment. This should support overall revenue growth of 40% for the full year, with continued acceleration through 2028.
Another key driver of revenue growth in fiscal 2028 and beyond is Marvell’s custom AI accelerator (XPU) business. Management said it expects the relatively small segment to grow 20% this year, but will double in 2028 as a major Tier 1 XPU customer (probably microsoft) volume production begins. Management forecast $10 billion in custom AI chip revenue for fiscal 2029. To put that in perspective, that’s more than Marvell’s total revenue last year.
There’s no doubt that Marvell is well positioned to deliver substantial revenue growth in the coming years, thanks to its leadership in networking chips and its rapidly growing custom computing business. While Huang didn’t set a timeline for his $1 trillion statement, Marvell would need to reach a price-to-sales ratio of around 40 by early 2029, based on guidance and management feedback. Its final P/E ratio would have to reach 127 based on current analyst estimates. For reference, Nvidia currently trades at 21 times sales and 33 times earnings.