UBS Group AG is optimistic about the market prospects of high-speed interconnect technology in data centers, and has raised the price targets for Marvell Technology Group Ltd (MRVL.US) and Astera Labs, Inc (ALAB.US).

As the market for high-speed interconnect technology in data centers (CXL) rapidly develops, UBS Group AG further bullish on the future growth prospects of Marvell Technology, Inc. (MRVL.US) and significantly raised the company's target price. The bank expects that benefiting from the construction of AI data centers and the accelerated popularization of CXL technology, Marvell is expected to continue to expand its market share in the coming years. UBS Group AG has raised Marvell's target price from $230 to $340 and maintains a "buy" rating. UBS Group AG expects that by 2027, the total potential size of the global CXL market will reach approximately $4.5 billion and is expected to further expand to $7 billion to $10 billion by 2030. Analyst Timothy Arcuri's team stated that as hyper-scale cloud service providers increase their investments in AI infrastructure, CXL is becoming an important interconnect technology in data centers, and Marvell is poised to benefit from this trend. UBS Group AG expects Marvell's revenue from CXL-related businesses to reach around $1 billion by 2027, with the main growth drivers coming from XPU-attach solutions, and the development of AI intelligent agents will further drive growth in CPU-related demand. The bank has also further raised its 2028 CXL-related revenue forecast for Marvell to approximately $2 billion. It is understood that CXL is a new generation high-speed interconnect standard for high-performance computing and AI data centers, enabling more efficient data sharing and resource scheduling between CPUs, GPUs, AI accelerators, and memory, and is considered one of the important foundational technologies for future AI server architectures. UBS Group AG stated that Marvell's CXL business currently covers three main areas, including traditional interconnects, XPU-attach, and CXL switch chips. Among them, XPU-attach will become the main source of income in the future. Analysts pointed out that Marvell has already secured five XPU-attach projects from two large US hyper-scale cloud service providers, including projects related to Alphabet Inc. Class C (GOOGL.US, GOOG.US) TPU. UBS Group AG believes that the company's previous target of approximately $1 billion in CXL revenue will mostly come from XPU-attach, rather than traditional CPU interconnect business; in the future, as AI intelligent agents drive CPU demand further growth, it will also bring additional incremental revenue for existing businesses. With this drive, UBS Group AG has also raised its overall revenue forecast for Marvell. The revenue forecast for 2027 has been raised from $16.5 billion to $16.8 billion, and for 2028 it has been significantly increased from $21.9 billion to $23.9 billion. In addition to Marvell, UBS Group AG believes that Astera Labs (ALAB.US) and Broadcom Inc. (AVGO.US) will also benefit from the expansion of the CXL market. Astera Labs' Leo CXL extender product has been adopted by Microsoft Corporation (MSFT.US) but currently has an annual shipment volume of approximately $25 million. UBS Group AG expects that as Microsoft Corporation's related projects enter the volume stage in the second half of 2026, and Astera Labs receive design orders from another large US cloud service provider, the company's related business income in 2027 is expected to grow significantly. Based on these expectations, UBS Group AG maintains a "neutral" rating for Astera Labs and has raised its target price from $205 to $400. As the scale of AI servers continues to expand, the demand for high-speed interconnect and memory sharing between CPUs, GPUs, and AI accelerators is constantly increasing, CXL is expected to become an important technological direction for future AI infrastructure, and will bring new growth opportunities for industry chain enterprises such as Marvell, Broadcom Inc., and Astera Labs.