Marvell Stock Rallies 9% Following Acquisition of Celestial AI
In Focus
- Marvel Technology acquired Celestial AI in a $3.25 billion deal
- The acquisition is expected to boost Marvell Technology’s AI connectivity
- The company plans to build photonics-based infrastructure products
Marvell Technology shares jumped 9% in premarket trading on December 3, 2025, after the company acquired chip startup Celestial AI in a $3.25 billion deal. According to Yahoo Finance, the Marvell Celestial AI acquisition deal deepened investor confidence in Marvell Technology’s capacity to build next generation infrastructure.
Deal Strengthens Marvell’s AI Connectivity Leadership
Marvell, which specializes in data infrastructure semiconductor solutions, considers the Celestial AI acquisition as critical in boosting its leadership in AI connectivity. The company is accelerating development of Marvell data center infrastructure as it works to regain momentum after its custom AI chips faced intense competition this year.
“The acquisition of Celestial AI is a transformative step in Marvell’s evolution and expands our leadership in AI connectivity, as scale-up becomes the next frontier in AI infrastructure. This builds on our technology leadership, broadens our addressable market in scale-up connectivity, and accelerates our roadmap to deliver the industry’s most complete connectivity platform for AI and cloud customers,” Marvell Technology Chairman and CEO Matt Murphy said in a statement posted on the company website.
Celestial AI develops photonic fabric, an optical interconnect technology platform for next generation AI computing systems. The acquisition deal puts Marvell Technology in direct competition with industry leaders like NVIDIA and Broadcom at a time when hyperscalers are rushing to develop faster, energy-efficient AI systems.
Already, Broadcom has partnered with OpenAI to develop and launch its own AI processors in a move that could redefine data center networking and chip supply strategies. In recent months, major technology firms have committed to spending heavily on AI infrastructure, with companies such as Microsoft exceeding investor spending expectations.
How Photonics Technology Will Boost Marvell’s Competitiveness
Following the Celestial AI acquisition deal, Marvell expects revenue from its chip production business to reach 20% in 2026. The deal would also help the company, which supports Amazon and Microsoft in developing their own AI chips, to tap into the photonic fabric chip maker’s technology and compete favorably in the AI chips market.
Photonic fabric technology uses light to connect AI and memory chips for data centers, instead of electrical signals. Marvell has issued a stock purchase warrant to Amazon. Under this warrant, Amazon can buy Marvell shares based on its purchase of photonic fabric products over the next five years. In the third-quarter, Amazon stock rose nearly 12% after revenue from its cloud computing unit, AWS grew by 20%.
Marvell Expects Celestial AI Deal to Boost Revenue
Marvell will use Celestial AI’s technology to build photonics-based infrastructure products. The company estimates that these products will contribute to a $10 billion market. Marvell expects this contribution to generate $500 million in annual revenue by the end of 2028 and double to $1 billion a year later.
In the 2026 fiscal year, the U.S.-based tech company expects its overall revenue to hit the $10 billion mark, with data center sales growing by 25%. Marvell estimates that revenue from its custom chips will increase by 20% in the coming year. LSEG data shows that Marvell’s annual price-to-earnings ratio stood at 27.25, far below Broadcom’s 38.39.
