Tech Explained: Marvell Technology Shares Gain Favor on Strategic AI Moves in Simple Terms

A recent upgrade from a major financial institution has cast a positive light on Marvell Technology, drawing investor attention to the semiconductor company’s ambitious artificial intelligence roadmap. This renewed optimism follows a significant acquisition announcement and raises questions about whether the stock, which has faced pressure, is poised for a sustained recovery.

The core of the growing bullish sentiment stems from Marvell’s early January announcement to acquire XConn Technologies for approximately $540 million. The transaction, structured as 60% cash and 40% stock, is slated for completion in early 2026. This move secures Marvell critical PCIe and CXL switching silicon technologies, which are vital components for high-speed connectivity within modern data centers.

This purchase is a key part of a broader corporate strategy to establish leadership in AI and cloud data center infrastructure. Combined with the planned acquisition of Celestial AI, the company is building a comprehensive connectivity platform. Management anticipates the XConn deal will begin contributing to revenue in the second half of fiscal year 2027, with projections for roughly $100 million in sales from this segment already set for fiscal 2028.

Analysts Revise Ratings Upward

Fueling the positive momentum, the Royal Bank of Canada (RBC) adjusted its stance on Marvell Technology on Friday, elevating its rating to “Moderate Buy.” This revision came shortly after an initial “Outperform” rating issued just days prior. RBC analysts expressed confidence primarily in the firm’s strong positioning within the data center market.

Should investors sell immediately? Or is it worth buying Marvell Technology?

This perspective finds support among other industry observers. Raymond James recently reaffirmed its “Strong Buy” recommendation, assessing the company’s strategic initiatives as advantageous for future market penetration.

Market Performance and Forthcoming Catalyst

Despite these strategic advancements, the share price has not yet fully reflected this confidence. The equity is currently trading at $80.38, marking a decline of about 10% since the start of the year.

Investors are now looking ahead to the next significant milestone: the upcoming quarterly earnings report, expected around March 4, 2026. This release will be a critical test to see if the projected growth in the data center segment meets expectations. The company forecasts over $300 million in revenue from this division for fiscal year 2026.