MRVL Expands AI Connectivity Through Acquisitions: What's Next?

Marvell Technology MRVL is expanding its AI connectivity portfolio by launching new products and through acquisitions. Its recent decision to acquire XConn Technologies was made to expand its portfolio with the inclusion of XConn’s PCIe and CXL switching solutions to its portfolio. This acquisition will enhance MRVL’s Ultra Accelerator Link (UALink) capabilities through talent acquisition and domain expertise.

As UALink evolves to become a new open industry standard for high-speed communications, MRVL gains from XConn’s advanced PCIe 5 and PCIe 6 switching portfolio, which boasts the industry’s highest-port-count, allowing its customers to benefit from a greater number of connected devices to a single root port, making communications smoother.

MRVL plans to build the industry’s most comprehensive CXL portfolio by integrating its CXL memory-expansion controllers with XConn CXL switches. With this acquisition, MRVL will be able to serve its next-generation AI and cloud customers. The XConn acquisition will bring in more than 20 customers. MRVL’s management expects XConn to add approximately $100 million in revenues in fiscal 2028.

The acquisition of XConn is preceded by the announcement of Celestial AI acquisition, which is supposed to enrich MRVL’s connectivity portfolio with advanced photonic interconnect optical connectivity technology designed to improve bandwidth and latency in AI systems. MRVL’s management expects Celestial AI to make meaningful revenue contributions in the second half of 2028 and $1 billion by the fourth quarter of fiscal 2029.

MRVL has a highly leveraged balance sheet with cash and cash equivalents of $2.71 billion and long-term debt of $3.97 billion as of Nov. 1, 2025. Given that MRVL is funding the XConn and Celestial AI acquisitions with a combination of cash, common stock and earnouts. In the case of the XConn acquisition, MRVL will pay 60% in upfront cash, whereas Celestial AI will involve cash expenditure of $1 billion; these factors might raise investor concern.

How Competitors Fare Against MRVL

Marvell Technology competes with Broadcom AVGO and Astera Labs ALAB in the connectivity space. Broadcom’s PCIe Gen 6 switch and retimer are integrated in the AI rack solutions used by the world’s biggest hyperscalers, original design manufacturers and original equipment manufacturers.

Broadcom’s PCIe switch and retimer use these enterprises to simplify interoperability by leveraging Broadcom’s advanced telemetry and diagnostics. Astera Labs’ Leo CXL smart memory controllers are built for memory expansion up to two terabytes and improve interoperability to accelerate AI performance and cloud computing.

MRVL's Price Performance, Valuation and Estimates

Shares of Marvell Technology have surged 17.1% in the past six months compared with the Zacks Electronics - Semiconductors industry’s appreciation of 25.2%.

MRVL Six-Month Performance Chart

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From a valuation standpoint, Marvell Technology trades at a forward price-to-sales ratio of 7.26, lower than the industry’s average of 8.59.

MRVL Forward 12-Month (P/S) Valuation Chart

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The Zacks Consensus Estimate for MRVL’s fiscal 2026 and 2027 earnings implies year-over-year growth of 80.9% and 26.2%, respectively. The estimate for fiscal 2026 has been revised upward in the past 60 days, while the estimate for fiscal 2027 has been revised upward in the past seven days.

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Marvell Technology currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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