The chip world got a jolt at Computex in Taipei on June 2 when Nvidia CEO Jensen Huang walked onto the stage during Marvell Technology’s keynote. Huang spent about 10 minutes praising Marvell’s networking and connectivity chips, then called it the next trillion-dollar company. The comment sent Marvell shares up 33% in a single session—the biggest one-day gain on record—adding roughly $56 billion in market value and pushing the company above $250 billion. The endorsement came alongside a roughly $2 billion equity investment by Nvidia in Marvell.
The Connectivity Case
Bulls argue that connectivity is becoming the next bottleneck in AI systems. As data centers pack more GPUs, the networks linking them need to keep up. Marvell builds switches, optics, and custom silicon for those networks, and data center products already drive most of its revenue. Huang’s appearance effectively validated that thesis in front of a global audience of chip buyers and investors.
But the stock’s surge also reflects the weight of Huang’s words. When the CEO of the world’s most valuable chip company puts his reputation—and Nvidia’s cash—behind a supplier, the market listens. The $2 billion investment gives Nvidia a stake in Marvell’s future and signals that the two companies will work closely on next-generation AI infrastructure.
Skeptics and Competition
Not everyone is convinced. Skeptics point to Marvell’s steep valuation after the jump and note that it faces strong competition from Broadcom in networking silicon. Broadcom has long dominated the switch chip market, and Marvell will need to win share in a field where the largest cloud operators often design their own chips.
There’s also a broader bearish chorus led by Michael Burry. His Scion Asset Management bought put options on one million Nvidia shares, a bet that the stock will fall. Burry warned of customer concentration: Nvidia’s top three customers accounted for 64% of its accounts receivable in the latest quarter, up from 56% the prior quarter and about 33% in 2020. He described much of today’s AI spending as a temporary benchmarking phase—a “tokenmaxxing bubble” that could fade.
Hidden Liabilities and Rental Price Drops
Burry has been shorting chip stocks more broadly, pointing to hidden leverage across the system. A Moody’s report backs up part of his concern: Microsoft, Amazon, Alphabet, Meta, and Oracle have $662 billion in future data center lease commitments that aren’t reflected on their balance sheets. That figure equals roughly 113% of their adjusted debt. If AI demand cools, those leases could become a heavy burden.
Meanwhile, reports of falling H200 rental prices are raising questions about near-term GPU demand. Lower prices suggest that supply may be catching up to the initial wave of orders, a sign that the frantic pace of AI infrastructure buildout might be slowing.
For now, the market is betting on Huang’s vision. Marvell’s next earnings report will be the first chance to see whether the company can deliver on the expectations set by a 33% rally. Burry’s put options will expire—and the off-balance-sheet lease commitments will eventually come due.
