Marvell (MRVL.US) stock price rising! Wells Fargo & Company states that Alphabet Inc. Class C's potential orders are a significant positive factor, and maintaining a target price of $135.

Alphabet Inc. Class C (GOOGL.US) is currently in deep discussions with Marvell Technology (MRVL.US) on the development of two new artificial intelligence chips. In response to this positive news, Marvell's stock price surged over 5%, although both parties have not yet formally commented on the reports. In contrast, Alphabet Inc. Class C's long-term partners Broadcom Inc. (AVGO.US) and contract manufacturer Celestica Inc. (CLS.US) experienced a slight retreat in their stock prices. According to disclosed details, the core of these discussions revolves around two new chips aimed at significantly improving AI model processing efficiency. The first key chip is the "Memory Processing Unit" (MPU), designed to work in conjunction with Alphabet Inc. Class C's existing Tensor Processing Unit (TPU) to address memory bottleneck issues in AI calculations; the second chip is the next-generation TPU optimized for handling AI inference workloads. It is reported that their goal is to complete the design of the MPU by 2027 and commence testing and production, indicating that Alphabet Inc. Class C is accelerating the construction of a cost-effective vertical integration hardware system to counter NVIDIA Corporation's dominance in the GPU field. Wells Fargo & Company analyst Aaron Rakers stated in a recent research report that if a deal with Alphabet Inc. Class C is finalized, it would be a "meaningful incremental positive factor" for Marvell. Rakers emphasized that Marvell's advantage in this bidding process mainly stems from its recently launched Structera CXL solution. He wrote in a client report that this potential MPU order may be a demonstration of Marvell's strength in Structera CXL technology, which significantly improves the efficiency of ultra-large-scale data center computing through rack-level memory pooling. Currently, Marvell's customized XPU business covers industry giants such as Amazon.com, Inc. and Microsoft Corporation, and the addition of Alphabet Inc. Class C will significantly enhance its customer diversification capabilities. Rakers maintains a "Hold" rating and a target price of $135 for Marvell. Rakers added, "During our meeting, CEO Matt Murphy emphasized that the company's Structera CXL solution has received design orders from three ultra-large-scale data centers, focusing on integrating existing memory capacities in their computing infrastructure utilizing CXL pooling technology. At the OFC trade show in mid-March, Marvell introduced the Structera S 30260 - a new 260-channel CXL switch that enables rack-level memory pooling and works in conjunction with the company's Structera A near memory accelerator, Structera X memory expansion controller, and Alaska PCIe/CXL retimer." Despite the upbeat market sentiment, industry analysts point out that Alphabet Inc. Class C's move is more of a "supply diversification" strategy rather than a complete replacement of existing partners. Just a few days before this news came out, Broadcom Inc. had just secured a long-term design agreement with Alphabet Inc. Class C until 2031. Bringing in Marvell reflects Alphabet Inc. Class C's focus on cost reduction in specific "inference" processes, aiming to make its TPU a more competitive and universal platform in the industry. According to Investors.com's estimates, as Alphabet Inc. Class C plans to license its TPU IP to companies such as Anthropic and Meta, its TPU business is expected to contribute over $10 billion in high-margin licensing revenue by 2027, and Marvell is clearly trying to get a piece of this rapidly growing market.