Marvell (MRVL) Stock: Chipmaker Nears $5 Billion Celestial AI Acquisition Deal

TLDR

• Marvell Technology is finalizing a multi-billion dollar acquisition of Celestial AI, with the deal potentially exceeding $5 billion including performance-based earnouts
• Celestial AI specializes in photonics technology that uses light to transfer data faster than traditional electrical connections in AI systems
• The acquisition would help Marvell compete more effectively with Broadcom in the custom AI chip market for cloud service providers
• Celestial AI secured $250 million in funding in March 2025, bringing total capital raised to $515 million with backing from AMD
• An announcement could happen as early as Tuesday, coinciding with Marvell’s quarterly earnings report

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Marvell Technology is moving closer to acquiring Celestial AI in a deal that could transform its AI chip business.

The Information broke the news Monday that Marvell is in advanced discussions to buy the startup. The proposed transaction mixes cash and stock.

Marvell Technology, Inc., MRVL

People familiar with the negotiations say the deal carries a multi-billion dollar price tag. With earnouts tied to hitting product milestones, the total could surpass $5 billion.

The companies might announce the deal as soon as Tuesday. That timing aligns with Marvell’s third-quarter fiscal 2026 earnings release scheduled for today.

What Celestial AI Brings

Celestial AI develops photonics technology that replaces copper wires with light for data transmission. This approach dramatically speeds up information flow inside data centers.

Fast data movement matters for AI systems running complex models. The technology addresses a major bottleneck in current AI infrastructure.

Marvell already sells high-speed networking components to cloud providers. Products include SerDes chips, switches, and other data center hardware.

Photonic interconnects would enhance Marvell’s existing chip lineup. The technology links electrical components with optical systems.

This connection represents a speed limit for large-scale AI applications. Marvell considers integrated photonics essential for future growth.

Owning photonics technology in-house would end Marvell’s reliance on external suppliers. Internal control typically accelerates product development cycles.

The acquisition also creates opportunities to sell combined solutions to existing cloud customers. Many already use Marvell’s networking chips.

Market Position and Backing

Marvell faces competition from Broadcom in serving cloud providers with custom chips. Broadcom currently holds a larger market share in this segment.

Marvell’s market capitalization sits at $78.54 billion. The stock closed at $91.10 on December 1, gaining 1.90%.

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

Advanced Micro Devices backs the startup through one of its investment divisions. Intel CEO Lip-Bu Tan serves on Celestial AI’s board of directors.

The investor roster demonstrates industry interest in photonics technology. Major semiconductor companies view it as strategically important.

Analyst Outlook

Wall Street analysts show mixed views on Marvell’s long-term prospects. TipRanks data shows 13 Buy ratings and six Hold ratings for the stock.

The consensus price target of $97 implies 6.5% potential upside from current trading levels. MRVL shares have declined 17.3% year-to-date.

Pre-market trading on December 2 showed the stock at $92.31. That represents a 1.33% gain from the previous close.

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