Marvell Technology forecast on Wednesday that its custom chip business revenue will surpass $10 billion by fiscal 2029, driven by cloud companies expanding artificial intelligence data centers and investing in custom chips to reduce reliance on Nvidia processors. The widespread application of AI is fueling demand for specialized chips, which, along with Marvell's interconnect technology, play a crucial role in advanced data centers by linking thousands of processors used for training and running AI models. The company's stock price has more than doubled year-to-date. Morningstar analyst William Kerwin noted that Marvell's custom chip revenue projection "implies a single business could add $5 billion in new revenue from fiscal 2028 to fiscal 2029, signaling another year of strong growth in fiscal 2029." Marvell now anticipates fiscal 2028 revenue will grow to approximately $16.5 billion, up from a prior forecast of $15 billion. For the second quarter, Marvell expects revenue of $2.7 billion, plus or minus 5%, exceeding the $2.6 billion average analyst estimate from an LSEG survey. Adjusted earnings per share are projected at 93 cents, plus or minus 5 cents, above the expected 90 cents. Marvell and its larger competitor Broadcom assist cloud computing companies in designing custom chips to meet their specific data center needs. This business has evolved into a significant operation for both firms. "We have broad custom engagements with all of the U.S. hyperscale data center operators," Marvell CEO Matt Murphy stated during an earnings call. The company has been a primary beneficiary of the surge in capital expenditure by hyperscale data center operators, who utilize its technology for high-speed connectivity within data centers. U.S. tech giants, including Alphabet and Amazon, are projected to invest over $700 billion in AI infrastructure this year, a substantial increase from approximately $400 billion in 2025. Marvell indicated it expects its data center business to grow by about 50% this year. The business reported first-quarter revenue of $1.83 billion, surpassing the previously expected $1.81 billion. For the first quarter, the company's revenue increased by 28% to $2.42 billion, exceeding the expected $2.4 billion. Adjusted earnings per share were 80 cents, above the expected 79 cents.