Marvell booked $2.17 billion in datacenter product sales in the second quarter of fiscal 2027, ended August 1, up 45.7 percent year on year and up 18.5 percent sequentially — and the bulk of that growth came from optical components, not the custom silicon deals that dominate headlines.

Analyst estimates of Marvell's AI business, built from hints and data points dropped by company executives since Marvell stopped reporting legacy division revenues explicitly after Q3 F2026, show total AI revenue at $1.82 billion in Q2 F2027. That is up 90.9 percent year on year and 23.6 times higher than three years ago, when the AI business stood at roughly $77 million in Q1 F2024 — about $12 million in early custom ASICs through the Amazon Web Services Graviton deal and $66 million in electro-optics.

What drives the numbers?

Electro-optical components remain the dominant AI revenue stream at Marvell, bringing in an estimated $1.4 billion in the quarter, up 97.2 percent year on year. AI XPU sales, by contrast, slumped sequentially to around $425 million — still up 43.1 percent and ahead of the 20 percent growth management had told Wall Street to expect a few quarters ago. Other datacenter products sold outside the AI customer set accounted for around $347 million, down 28.4 percent.

The datacenter segment now represents 79.3 percent of total sales. Add legacy enterprise networking — an estimated $266 million, up 37.4 percent — and the combined share reaches 89 percent of revenues. All legacy businesses together rose 10.1 percent to $567.8 million.

The datacenter business has grown by a factor of 8.1x since Q2 F2021, while legacy chip businesses grew only 1.3x over the same period. That trajectory reflects a series of acquisitions — IBM's custom chip business out of GlobalFoundries, Inphi, Celestial AI — plus the sale of the automotive chip business to Infineon. Further divestitures would not be surprising as Marvell seeks cash and focus.

What did the quarter deliver overall?

Marvell posted total revenue of $2.74 billion, up 36.5 percent, with operating income of $460 million, up 58.5 percent, and net income of $308 million, up 58.1 percent. The company holds $3.93 billion in cash, which it will need to meet obligations to its chip-shepherding customers.

Chairman and CEO Matt Murphy raised guidance again. Marvell now expects around $3.15 billion in sales in Q3 F2027 — up 51.8 percent year on year and 15 percent sequentially — with the datacenter business growing about 20 percent sequentially and roughly 75 percent year on year. Murphy said growth will accelerate in Q4 F2027, and the first revenues from Google's recently announced expanded partnership will land in Q3 F2027.

The fiscal 2027 revenue forecast rose to $12 billion, up from $11.5 billion a quarter ago. That implies Q4 F2027 revenue around $3.7 billion, up 66.4 percent year on year. Custom CPUs and XPUs are on track for about $2 billion in sales in F2027, growing around 33 percent, while legacy communications and other chips are expected to grow a mere 10 percent or so.

How big is fiscal 2028 supposed to be?

Murphy raised the F2028 guidance by $1.5 billion from the prior quarter's forecast, to $18 billion — a 50 percent growth rate — and said the datacenter business would grow by more than 60 percent in fiscal 2028. Network components for UALink, ESUN and NVSwitch networks, plus the Celestial AI optical interposer, are expected to contribute on the order of $300 million, with Celestial AI hardware representing about $150 million.

The custom CPU and XPU accelerator business is expected to more than double in F2028 and grow even faster in 2029, driven in part by the Google deal but also by chip projects Marvell is shepherding for AWS and others.

Why does the reporting structure matter?

Marvell, like Nvidia with its Edge Computing grouping, now lumps everything outside the datacenter into a single bucket. The SEC's loose rule says companies should report to investors, in a general sense, the way they run and talk about the business internally. Without explicit divisional disclosure at the upcoming financial analyst day, error bars on estimated division sales keep getting fuzzier — even as Marvell emerges as a counterbalance to Nvidia in GenAI alongside Broadcom.