Marvell: Nvidia Partnership Endorses XPU Strategy, and There’s More Upside from Here

Key Morningstar Metrics for Marvell Technology

• Fair Value Estimate
  : $130.00
• Morningstar Rating
  : ★★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : High

Nvidia NVDA and Marvell Technology MRVL announced a partnership, including Nvidia’s $2 billion direct investment in Marvell. The companies plan to pair Marvell’s custom artificial intelligence chips, or XPUs, with Nvidia’s networking products and rack-scale designs.

Why it matters: We see this as an endorsement of Marvell’s XPU strategy and XPUs more broadly. We believe XPUs help large AI customers avoid vendor lock-in, gain flexibility, and save costs. This agreement helps add interoperability between XPUs and GPUs, increasing the XPU value proposition.

• From Nvidia’s perspective, this further extends the firm’s systems reach beyond GPUs. We expect XPUs to make up 25% of the total AI compute market in 2030, and agreements like these keep Nvidia as a strong force even when its GPUs aren’t in play.
• The agreement includes placement for Marvell’s scale-up networking as well, which Marvell typically classifies as “XPU Attach.” We believe these “attach” sockets augment the firm’s revenue per XPU and help it play across AI infrastructure even when it doesn’t provide the compute chip.

The bottom line: We maintain our $130 fair value estimate for narrow-moat Marvell, and this announcement fits with our bullish XPU growth expectations over the next five years. Shares rose 8% intraday March 31 on the news and continue to look attractive to us.

• XPU growth is one of Marvell’s main valuation drivers, and we believe the Nvidia partnership extends its ability to win more placements for its chips. The market has grown bearish on Marvell’s XPU competitive position, and we look to a catalyst in late 2026 as Microsoft Maia revenue ramps.
• We model 35% annualized growth for Marvell’s XPU revenue over the next five years, driven by its ramp with Microsoft. We don’t share investor concerns over its competitive position and see the Nvidia partnership as a bullish indicator that Marvell has staying power in this high-growth market.