Shares of Marvell Technology (MRVL) rallied more than 7% in Friday's trading session, touching an intraday high of $223.67, after Nvidia confirmed its $12.9 billion acquisition of the open-source artificial intelligence platform Hugging Face.

While the acquisition news lifted the broader AI semiconductor industry, Marvell gained particularly strongly because of its distinctive ties to Nvidia. The GPU maker holds a substantial $2 billion equity position in Marvell, and the two companies operate under a strategic collaboration agreement centered on silicon photonics technology and platform interoperability. Under this partnership, enterprise customers can deploy Marvell's XPU solutions seamlessly within Nvidia's NVLink infrastructure framework. The deal also signals how the largest AI infrastructure players are consolidating up and down the software stack — from model development platforms to the networking silicon that shuttles data between chips — a dynamic that tends to flow through to suppliers such as Marvell that are embedded in those ecosystems.

Nvidia CEO Jensen Huang disclosed that open-source models now account for more than half of Nvidia's revenue stream, underscoring the rationale for the Hugging Face acquisition. The platform serves a user base exceeding 18 million individuals, hosts more than 3 million AI models, and supports over 200,000 commercial enterprises. The scale of that user base reflects the broader industry shift toward openly available models, which enterprises increasingly customize for their own workloads — and which in turn drives demand for the accelerator and networking hardware needed to run them.

Exciting day for NVIDIA and @huggingface . Open models strengthen safety and cybersecurity, accelerate innovation and diffusion, and enable sovereignty. They allow every developer, startup, university, industry and country to build with, customize and benefit from AI. Thank you… — Jensen Huang (@JensenHuang) September 3, 2026

Given the deep integration between Nvidia's and Marvell's operations, stronger performance at Nvidia translates directly into favorable conditions for Marvell's growth trajectory.

Momentum Building Across Core Business

Marvell's latest quarterly results provided an additional catalyst for the stock's advance. Second fiscal quarter revenue rose 37% from the prior-year period to a company record of $2.74 billion, exceeding internal projections by $39 million. The Data Center segment generated $2.17 billion in sales, up 46% and representing 79% of consolidated revenue. Adjusted earnings per share reached $0.94, a 40% year-over-year increase.

Adjusted operating margin expanded to 36.6%, and adjusted operating income crossed the $1 billion threshold for the first time in the company's history. CEO Matt Murphy described AI-driven order bookings as "exceptionally robust."

For the third quarter, management projects revenue of approximately $3.15 billion, growth exceeding 50%, with Data Center segment revenue expected to accelerate by roughly 75% over the period. The company raised full-year Fiscal 2027 revenue expectations to $12 billion, representing approximately 45% expansion, and set Fiscal 2028 guidance at $18 billion, implying an additional 50% growth trajectory.

Optical Connectivity Represents Major Growth Vector

Marvell has positioned itself to capitalize on the industry shift from traditional copper interconnects to optical connectivity solutions within AI data centers. As AI computing clusters expand into multi-rack architectures, copper-based connections face growing challenges in power efficiency, signal integrity, and bandwidth limitations. Optical alternatives deliver superior performance with reduced latency and energy consumption. Marvell competes in this market alongside other interconnect and networking silicon suppliers, and the company's cadence of acquisitions suggests it views scale and breadth of portfolio as key to holding ground as data center architectures evolve.

The company's product portfolio includes PAM4 and coherent DSP solutions, silicon photonics components, and advanced Ethernet switching technology. Its Ara and Aquila product lines enable 1.6T connectivity. The recent Celestial AI acquisition added a Photonic Fabric offering that interconnects processors with shared memory resources across expansive computing environments. Celestial-related revenue is projected to reach a $500 million annual run rate by the fourth quarter of Fiscal 2028, and is expected to subsequently double to $1 billion annually.

Further acquisitions include Polariton, which brings 3.2T-and-beyond photonic capabilities, and XConn, which adds PCIe and CXL switching expertise.

An enhanced collaboration agreement with Google encompasses potential revenue opportunities approaching $120 billion extending through Fiscal 2033.

Wall Street analysts maintain a Strong Buy consensus rating on MRVL, supported by 21 Buy recommendations and five Hold ratings, with a mean price objective of $302.33, suggesting approximately 35% potential appreciation from current levels.

Source: Blockonomi