On Tuesday, chip - maker Marvell Technology revealed its intention to purchase network equipment provider XConn Technologies. The deal, structured as a combination of cash and stock, is valued at around $540 million. This strategic move is aimed at bolstering Marvell's foothold in the data center hardware market.

This acquisition is set to work wonders for Marvell in multiple ways. It will not only expand Marvell's range of network products but also bring the talented engineering team of XConn under its wing.

The transaction is on track to be finalized by early 2026. Starting from the second half of fiscal year 2027, XConn's product line is expected to start making a positive impact on Marvell's sales and profits. By fiscal year 2028, it is projected to generate roughly $100 million in revenue. Analysts have put forth a forecast that Marvell's revenue will hit $12.75 billion in fiscal year 2027.

The market reacted positively to this news. In early trading, Marvell's stock price jumped by more than 2%. It's worth noting that last year, the company faced a significant setback, with its stock price plummeting by over 23% due to intense market competition.