Marvell's AI Surge Offsets Automotive Ethernet Divestiture

According to the latest reports, Marvell Technology (NASDAQ:MRVL) is expected to deliver guidance for its second-quarter fiscal 2026 results that will exceed Wall Street's estimates. This positive outlook is primarily driven by the strong momentum in the company's optical networking segment, even after Marvell completed the $2.5 billion sale of its Automotive Ethernet unit to Infineon Technologies earlier this month.

While the divestiture has trimmed Marvell's near-term revenue expectations, analysts believe the growing demand in AI-related markets will help offset this loss. Morgan Stanley estimates Marvell's AI revenue to reach $876 million for the July quarter, up 6.6% sequentially, with further growth expected in the coming months.

Marvell's optical products are seen as more durable and profitable than its ASIC business, which faces some uncertainty around Amazon's Trainium 3 chip. However, the ASIC revenue is projected to climb steadily, potentially reaching $2 billion for the fiscal year.

The report also highlights near-term sentiment challenges for Micron Technology, citing pressure on high-bandwidth memory pricing with at least one customer, NVIDIA, expected to reset terms next year. Investors will be closely watching Marvell's results for signs of sustainable AI-driven growth and clearer margin trends, while also keeping an eye on the potential impact of memory pricing and ASIC uncertainty.