UBS has further enhanced its positive outlook on the future growth prospects of Marvell Technology (MRVL.US) and significantly increased its price target for the company, driven by the rapid development of the data center high-speed interconnect technology (CXL) market. The bank anticipates that Marvell is poised to consistently expand its market share in the coming years, benefiting from the construction of AI data centers and the accelerated adoption of CXL technology.
UBS has raised its price target for Marvell substantially from $230 to $340, while maintaining a "Buy" rating. The bank projects that the total addressable global CXL market could reach approximately $4.5 billion by 2027, with the potential to further expand to between $7 billion and $10 billion by 2030.
Analyst Timothy Arcuri and his team noted that as hyperscale cloud service providers continue to ramp up investments in AI infrastructure, CXL is emerging as a critical interconnect technology for data centers, positioning Marvell favorably within this trend. UBS forecasts that Marvell's revenue from CXL-related businesses could reach around $1 billion by 2027, primarily driven by growth in XPU-attach solutions. The development of AI agents is also expected to further stimulate demand growth related to CPUs.
Concurrently, the bank has further revised its forecast for Marvell's CXL-related revenue in 2028 upwards from previous expectations to approximately $2 billion. CXL is understood to be a next-generation high-speed interconnect standard designed for high-performance computing and AI data centers. It enables more efficient data sharing and resource scheduling between CPUs, GPUs, AI accelerators, and memory, and is considered a foundational technology for future AI server architectures.
UBS stated that Marvell's current CXL business primarily encompasses three key areas: traditional interconnects, XPU-attach solutions, and CXL switch chips. Among these, XPU-attach is expected to become the most significant revenue driver in the future. Analysts pointed out that Marvell has already secured five XPU-attach projects with two major U.S. hyperscale cloud service providers, including a project related to Google's (GOOGL.US, GOOG.US) TPU.
UBS believes that the majority of the company's previously stated target of about $1 billion in CXL revenue will originate from XPU-attach, rather than traditional CPU interconnect business. Looking ahead, the anticipated growth in CPU demand driven by AI agents is also expected to provide additional incremental growth for the company's existing operations.
Propelled by these factors, UBS has also increased its overall revenue forecasts for Marvell. Specifically, the revenue forecast for 2027 has been revised from $16.5 billion to $16.8 billion, while the 2028 forecast has been significantly raised from $21.9 billion to $23.9 billion.
In addition to Marvell, UBS believes that Astera Labs, Inc. (ALAB.US) and Broadcom (AVGO.US) will also benefit from the expansion of the CXL market. Astera Labs' Leo CXL Extender product has already been adopted by Microsoft (MSFT.US), though its current annual shipment scale is around $25 million.
UBS anticipates that Astera Labs' related business revenue could see significant growth by 2027, driven by the scaling of Microsoft's project in the second half of 2026 and the company securing a design win from another major U.S. cloud service provider. Based on these expectations, UBS maintains a "Neutral" rating on Astera Labs but has raised its price target from $205 to $400.
As the scale of AI servers continues to expand, the demand for high-speed interconnects and memory sharing between CPUs, GPUs, and AI accelerators is increasing. This positions CXL as a key technological direction for future AI infrastructure, presenting new growth opportunities for industry players like Marvell, Broadcom, and Astera Labs.
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