Huang: Marvell Could Be ‘Next Trillion-Dollar’ Company

At Computex in Taipei on June 2, Nvidia CEO Jensen Huang made a surprise appearance during Marvell CEO Matt Murphy’s keynote and spent about 10 minutes on stage. Huang called Marvell Technology the ‘next trillion-dollar company.’

The remark coincided with a roughly 33% one-day jump in Marvell shares, the largest single-session gain on record for the company. The move added about $56 billion to Marvell’s market value and pushed its market capitalization above $250 billion. Over two trading days after Huang’s comments, Marvell’s market value rose by about $90 billion from its level before the appearance.

Nvidia completed an approximately $2 billion equity investment in Marvell earlier this year. The deal links Marvell’s optical networking technology and custom accelerators to Nvidia’s AI factory architecture. Marvell produces networking switches, optical components and custom silicon used to move data between servers and processors in large-scale data centers.

Investors have pointed to data center revenue growth at Marvell as part of the bullish case. Some market participants say connectivity-moving large volumes of data across thousands of processors-is a bottleneck after compute and memory, and that Marvell’s equipment helps address that need. Other investors have noted Marvell trades at a high valuation and faces competition in networking silicon from firms such as Broadcom.

Investor Michael Burry’s Scion Asset Management bought put options on one million Nvidia shares following the event and flagged concentrated customer exposure at Nvidia. Burry highlighted that the top three customers now account for 64% of Nvidia’s accounts receivable, up from 56% the prior quarter and about 33% in 2020. He warned that ‘the conditions for an aggressive fall are as strong as they have been in the history of the stock’ and described current spending as a ‘tokenmaxxing bubble.’

A February Moody’s report found that Microsoft, Amazon, Alphabet, Meta and Oracle have about $662 billion in future data center lease commitments that are not yet reflected on their balance sheets. Those lease obligations convert to cash costs once the leases begin. Separately, reports of falling rental prices for certain H200 GPUs have raised questions about near-term demand for some accelerators.

Marvell’s shift toward data center products has drawn investor attention since Nvidia’s investment and Huang’s onstage endorsement. Analysts continue to monitor Marvell’s revenue mix, competitive pressures in networking silicon, customer concentration in the supply chain and potential lease or financing obligations at major cloud customers.