Marvell (MRVL) earnings report Q3 2026

semiconductor company Marvel Announced that it will be held on Tuesday Buy Celestial AI at least $3.25 billion in cash and stock.

Marvell said the purchase price could rise to $5.5 billion if Celestial hits revenue milestones in question.

Marvell shares rose 13% in extended trading Tuesday, the company reported third quarter profit Beating expectations, the company said in its earnings release that it expects data center revenue to grow 25% next year.

The deal is an aggressive move by Marvell to bring complementary technology to its semiconductor networking business. The addition of Celestial could enable Marvell to sell more chips and parts to companies that have already committed to spending hundreds of billions of dollars on AI infrastructure.

Marvell shares are down 18% so far in 2025, even as semiconductor rivals broadcom There have been huge valuation increases driven by excitement about artificial intelligence.

Celestial is a startup focused on developing optical interconnect hardware that it calls “photonic fabric” for connecting high-performance computers. It was heavenly reportedly It was valued at $2.5 billion in the financing round in March and Intel CEO Lip-Bu Tan joined the startup’s board in January.

Optical connections are becoming increasingly important because the most advanced AI systems need these parts connecting dozens or hundreds of chips so that they can work as a single piece to train and run the largest large language models.

Currently, many AI chip connections are made using copper cables, but newer systems are increasingly using optical connections because they can transfer more data faster and allow for physically longer cables. Optical connections are also more expensive.

“This builds on our technology leadership, expands our addressable market in scalable connectivity, and accelerates our roadmap to deliver the industry’s most complete connectivity platform for AI and cloud customers,” Marvell CEO Matt Murphy said in a statement. he said.

Marvell said the first application of Celestial’s technology will be to connect a system based on “massive XPUs,” which are specialized AI chips typically produced by companies that have invested billions in AI infrastructure.

The company on Tuesday said Celestial may even integrate its optical technology into custom chips, and depending on customer interest, the startup’s technology will soon be integrated into custom AI chips and related parts called switches.

Marvell’s acquisition of Celegstial “will help further accelerate optical scale-up innovation for next-generation AI deployments,” Dave Brown, vice president of Amazon Web Services, said in a statement.

The deal’s maximum payment will be triggered if Celestial records cumulative revenue of $2 billion by the end of fiscal 2029. The deal is expected to be completed early next year.

In third-quarter earnings on Tuesday, Marvell earned 76 cents per share on sales of $2.08 billion, while LSEG expected 73 cents on sales of $2.07 billion. Marvell said it expects fourth-quarter revenue to be $2.2 billion, slightly above LSEG’s $2.18 billion forecast.

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