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Marvell Technology (NASDAQ: MRVL) could be a perfect opportunity to buy with $10,000. While the stock has tripled in 52 weeks, it's also down 20% from its 2026 high. Many investors see the pullback as a chance to add to their position.
Indeed, behind the sell-off are major developments that could make Marvell's AI story more attractive than it appears today, such as its custom silicon business, which could become one of its biggest growth drivers.
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Marvell just delivered another record quarter, with revenue accelerating 37% year over year and data center revenue growing 46%. Management said AI-related bookings remain exceptionally strong and raised its revenue outlook for both fiscal 2027 and fiscal 2028.
AI demand is clearly a key driver of Marvell's business, with its data center business now accounting for around four-fifths of revenue, giving Marvell much greater exposure to the AI build-out. So it should be no surprise that Marvell is becoming a key supplier of custom silicon for hyperscalers.
A perfect example of this is Marvell's expanded relationship with Alphabet, for example, which covers a broad range of custom products connected to Google's Tensor Processing Unit (TPU) ecosystem, including AI chips, storage and networking hardware, and memory interface products.
Marvell is also working on 18 custom AI chip projects for four major hyperscalers and several fast-growing AI companies. That includes both AI chips and the supporting devices needed to connect and power them.
Management also said that its Custom business should accelerate in the second half of fiscal 2027. That gives investors a major growth engine just as the company's existing data center connectivity business picks up.
That shows the breadth of opportunity. Marvell isn't simply betting on one piece of the AI stack. It's also building out the connectivity layer that allows all this AI compute to work together.
Perhaps one of the most exciting parts of Marvell's strategy is its push into optical connectivity. The company completed its acquisition of Celestial AI to add Photonic Fabric technology, which is designed to provide high-bandwidth, high-speed connections across large-scale AI systems.
That matters because AI systems are becoming more distributed. As clusters grow, moving information between chips becomes just as important as the chips themselves. Marvell is positioning itself to benefit from that trend by supplying hardware that facilitates the flow of information between these chips.
Celestial AI also gives Marvell exposure to a new market rather than simply adding another product to an existing one. Marvell sees the technology as opening up more opportunities in scale-up interconnects. The company expects the acquisition to begin contributing revenue in the second half of fiscal 2028.
That said, Marvell's expansion into optical doesn't end with Celestial AI. The company also announced an expanded agreement with GlobalFoundries to increase production capacity for semiconductors used in high-speed optical connections.
With that, Marvell is better positioned to offer a full connectivity stack. Its portfolio now spans optical links, switching, PCIe, and CXL, helping AI systems move data more efficiently as workloads become more demanding.
Taken together, Marvell's portfolio appears better aligned with the complexities of AI infrastructure, from custom silicon and optical connectivity to memory interfaces. And demand for these components will only pick up as AI clusters scale, giving Marvell a much stronger growth outlook.
Marvell stock experienced a sharp pullback from its 2026 high, but its investment case is still intact. Wall Street agrees, pricing the stock at a generous 37 times forward earnings.
Data center demand remains strong, custom silicon is becoming a bigger growth driver, and Marvell is expanding its connectivity business. Plus, add in its growing relationships with major hyperscalers and new technologies from recent acquisitions.
With its broadening portfolio, the company has multiple ways to benefit from the AI build-out, especially as AI systems scale. That's why, for investors with $10,000, Marvell looks like a compelling place to put it. This pullback serves as a timely opportunity to buy more Marvell shares, adding some breathing room under a heavy valuation.
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Rick Orford has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Globalfoundries, and Marvell Technology. The Motley Fool has a disclosure policy.
The Best Stock to Invest $10,000 In Right Now was originally published by The Motley Fool
