Shares of Marvell Technology Inc (MRVL  ) were trading under pressure on Tuesday, after the company closed its acquisition of Celestial AI.

Here are the key analyst insights:

  • Needham analyst Quinn Bolton reiterated a Buy rating, while reducing the price target from $120 to $118.
  • Benchmark analyst Cody Acree reaffirmed a Hold rating on the stock.
Needham: Revenue contribution from the acquisition of Celestial AI, a pioneer of photonic fabric technology for scale-up optical interconnects, is expected to begin in the second half of fiscal 2028, Bolton said. Revenue is expected to double to an annualized run rate of $1 billion by the fourth quarter of fiscal 2029.

The analyst lowered the non-GAAP earnings estimates for fiscal 2027 and 2028 from $3.60 per share to $3.40 per share and from $4.85 per share to $4.70 per share, respectively, to reflect incremental operating expenses ahead of revenue contribution.

Celestial AI has already received "a major design award" with Amazon.com Inc (AMZN  ), Bolton stated. Marvell expects the CPO solution to begin shipping in the back half of 2027. Amazon, meanwhile, will "increase its proliferation of CPO as future generations of the chip are rolled out."

Benchmark: Marvell expects only a small revenue contribution from the Celestial AI acquisition in Q3 of 2028, Acree said. The company expects this to ramp to $125 million in Q4 of that year. It represents an annualized run rate of $500 million, he added.

"At this point, the revenue contribution should fully offset the dilutive impact of the increased operating expenses, lower interest income, and increased share count dilution," the analyst wrote. The completion of the acquisition also reduced Marvell's cash balance by $1 billion. It also lowered expected interest income by $9.5 million per quarter.

MRVL Price Action: Shares of Marvell Technology had declined by 4.50% to $75.12 at the time of publication on Tuesday.