Marvell Technology (MRVL) guided to 25% data-center revenue growth next year, above prior expectations, as earlier ASIC-related headwinds have largely passed, Morgan Stanley said in a note Wednesday.

The chipmaker reported fiscal Q3 revenue of $2.07 billion, up 37% from a year earlier and slightly ahead of Wall Street estimates. Data-center sales climbed 38% year over year, while earnings of $0.76 per share topped analyst forecasts. Marvell also issued above-consensus guidance for the current quarter, citing broad-based strength across cloud connectivity and AI-focused products.

The company's acquisition of Celestial AI, though "dilutive" in the near term, strengthens its position in next-generation optical scale-up architectures as copper interconnects approach physical limits. Celestial is expected to generate meaningful revenue in late fiscal 2028, the note said.

Morgan Stanley reiterated its equal weight rating on Marvell and raised its price target to $112 from $86.

Shares of the company were up more than 3% in recent Wednesday trading.

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