Marvell Stock Just Hit a New High. A Quiet Amazon Decision Could Be Why.
A report that the cloud giant may start selling its custom AI chips to outside customers could broaden the market for the semiconductor specialist that designs them.
By Daniel Sparks
Shares of data infrastructure chip designer Marvell Technology (MRVL +7.30%) hit a record high of about $330 on Thursday before easing to close up roughly 7%, near $311. The move also came as one Wall Street analyst raised their 12-month price target for the stock from $260 to $385, citing the company's optical-networking opportunity. The stock has now more than tripled in 2026.
What's unusual is that one possible spark had little to do with anything Marvell itself announced. It came from a report about what Amazon (AMZN +3.01%) might do with a line of chips that Marvell helps design.
Bloomberg reported that Amazon Web Services, the company's cloud computing arm, is in early talks to sell its custom Trainium artificial intelligence (AI) chips directly to outside companies for use in their own data centers. Until now, Trainium has been available only to customers renting computing power through AWS. Opening it up would mark a significant shift -- and another challenge to Nvidia, whose graphics processing units (GPUs) still anchor most AI computing.
So why would a potential move involving Amazon's chips push a different company's stock to a new high?
A wider market for custom silicon
Marvell has been one of the key partners helping Amazon design Trainium, and that work sits inside the part of Marvell that matters most right now. The company's data center revenue reached about $1.83 billion in its fiscal first quarter of 2027 (the period ended May 2, 2026), up 27% year over year and about 76% of total revenue. Overall revenue hit a record $2.4 billion, up 28%, and management guided for fiscal second-quarter revenue of about $2.7 billion, or roughly 35% growth.
CEO Matt Murphy said the company raised its revenue outlook for both fiscal 2027 and fiscal 2028 on the strength of what he called exceptional AI-related bookings. Demand was running hot well before this week's news.
A report that AWS might sell Trainium beyond its own cloud points to even more of it. Amazon's AI chief, Peter DeSantis, said the current generation of the chip is largely sold out, and he framed selling it externally as a way to reach more customers rather than cut into AWS.
"We view AI infrastructure as rapidly evolving. And we're constantly looking at ways to get to more customers," DeSantis said in an interview with Bloomberg.
The more Trainium chips that get built and sold, the larger the pool of custom-silicon work Marvell can supply. And the company also makes the high-speed optics and networking gear that ties thousands of these chips into a single AI system.
What the record high leaves out
A bigger Trainium market, though, doesn't automatically mean a bigger Marvell. While Marvell helped design an earlier generation of Trainium, reports suggest Amazon has handed the design work on the newer Trainium3 and Trainium4 chips to a Taiwanese rival, Alchip Technologies -- a shift neither company has confirmed.
Adding to the risk is valuation. Marvell's forward price-to-earnings ratio sits at about 70 -- a level that already prices in years of strong growth and leaves little cushion for any unexpected detours.
So is the stock a buy here? I don't think so.
Yes, Marvell sits in the middle of an attractive corner of the AI build-out, and a broader market for Amazon's chips would likely help it. And yes, it is scheduled to be added to the S&P 500 on June 22. But it's unclear how much of the Trainium work it will actually keep. And with Marvell stock's valuation priced for near perfection, the decision is particularly hard.If shares fell sharply or if sales growth accelerates further, I may reconsider. For now, however, too much optimism seems priced in for me to get on board.