Marvell (MRVL) Stock: Chipmaker Pursues Multi-Billion Dollar Celestial AI Acquisition

TLDR

• Marvell Technology is in advanced talks to acquire AI chip startup Celestial AI in a cash-and-stock deal worth multiple billions of dollars
• The total deal price could exceed $5 billion when including earnouts tied to product milestones, with an announcement possible as soon as Tuesday
• Celestial AI uses photonics technology that transmits data with light instead of electrical signals to speed up connections between AI chips and memory
• The startup raised $250 million in March 2025, bringing total funding to $515 million, with backing from AMD and Intel CEO Lip-Bu Tan on its board
• The acquisition would strengthen Marvell’s position against competitor Broadcom in the custom chip market for cloud providers

Marvell Technology is closing in on a deal to buy Celestial AI. The acquisition could reshape the AI chip landscape.

The Information reported Monday that Marvell is in advanced talks to acquire the AI startup. The deal structure combines cash and stock.

Marvell Technology, Inc., MRVL

Sources familiar with the negotiations say the base deal value sits in the multiple billions range. When factoring in earnouts from product milestones, the total price tag could climb above $5 billion.

An announcement could drop as soon as Tuesday. Neither Marvell nor Celestial AI responded to requests for comment.

The timing lines up with Marvell’s Q3 fiscal 2026 earnings report. That’s scheduled for release today.

Why Marvell Wants Celestial AI

Celestial AI brings photonics technology to the table. This tech uses light instead of copper wires to move data inside data centers.

The approach speeds up data transfer in AI systems. That’s critical for running large AI models.

Marvell currently sells high-speed chips to cloud companies. These include SerDes, switches, and network components.

Adding photonic interconnects would upgrade Marvell’s product lineup. It bridges the gap between electrical chips and optical technology.

Right now, this connection limits speed for massive AI models. Marvell views integrated photonics as a key future direction.

The acquisition would eliminate Marvell’s dependence on third-party optical technology. Owning it internally should accelerate product development.

It also opens cross-selling opportunities with major cloud customers already buying Marvell chips.

The Competitive Picture

Marvell competes with Broadcom for custom chip business from cloud providers. Broadcom is the bigger player in this space.

Marvell’s market cap stands at $78.54 billion. That’s roughly where things sit based on recent trading.

Celestial AI raised $250 million in venture funding in March 2025. That round pushed total capital raised to $515 million.

A division of Advanced Micro Devices backs the startup. Intel CEO Lip-Bu Tan sits on Celestial AI’s board.

The company’s investor lineup shows the industry’s interest in photonics. Major chip players see value in the technology.

Analysts remain split on Marvell’s outlook. The stock carries a Moderate Buy rating on TipRanks based on 13 Buy and six Hold ratings.

The average price target of $97 suggests 6.5% upside from current levels. Year-to-date, MRVL stock has dropped 17.3%.

Marvell shares closed at $91.10 on December 1, up 1.90% for the day. Pre-market trading showed the stock at $92.31, up another 1.33%.

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