MaxLinear Inc

MaxLinear is benefiting from the accelerating AI data-center optical transition, with Infrastructure revenues reaching roughly $85 million in the second quarter of 2026, up 145% year over year and representing about half of total revenues. The company's Keystone platform, a 5-nanometer, 100G-per-lane PAM4 DSP and SerDes, is ramping into high-volume production at major hyperscale customers for 400G and 800G deployments, offering nearly 40% lower power consumption than competing solutions. Strong orders and better visibility prompted MaxLinear to raise its 2026 optical data-center revenue expectation to $210-$230 million, with the more than $50-million increase entirely attributable to Keystone. The company is also preparing for the next generation with Rushmore, its 1.6T PAM4 DSP, which is sampling and undergoing customer qualification, with initial ramps expected in the second half of 2027. MaxLinear faces tough competition from Broadcom, whose AI semiconductor revenues reached $10.8 billion in second-quarter fiscal 2026, and Marvell, which expects interconnect revenues to grow more than 70% in fiscal 2027. MaxLinear's shares have appreciated 270.5% year to date, and the Zacks Consensus Estimate for its earnings is 56 cents per share, up 20 cents over the past 30 days, suggesting 300% year-over-year growth.

MaxLinear's infrastructure business became its largest revenue category in the second quarter of 2026, surging 145% year over year as hyperscale customers ramped deployments of its optical data center platforms. Total revenues jumped 55% year over year, driven by the Keystone 5-nanometer PAM4 DSP and SerDes platform now in volume production for 400G and 800G optical transceivers. Management raised the 2026 optical data center revenue outlook to between $210 million and $230 million and expects the richer infrastructure mix to support higher gross margins. The company faces competition from Marvell Technology and Broadcom, with Broadcom reporting AI semiconductor revenue of $10.8 billion in its fiscal second quarter of 2026. MaxLinear shares have returned 310.7% year to date, and the Zacks Consensus Estimate for 2026 earnings stands at $1.30 per share.

ClearBridge Investments highlighted MaxLinear as a potential beneficiary of the AI transceiver market in its second-quarter 2026 Small Cap Growth Strategy commentary. The firm expects strong earnings growth from the fabless semiconductor company, citing prior research and development investments that position it for opportunities in high-speed communications networks. MaxLinear closed at $91.24 per share on July 23, 2026, with a market capitalization of $8.17 billion, and its stock has gained 457.70% over the past 52 weeks. The Russell 2000 Growth Index rose 25.6% during the quarter, driven by AI enthusiasm and strength in biotech, though the Strategy lagged the benchmark due to underperformance in certain healthcare and financial stocks.

MaxLinear raised its 2026 optical data center revenue expectations to between $210 million and $230 million and guided for third-quarter revenue of $210 million to $220 million. Co-Founder, Chairman, CEO and President Kishore Seendripu said second-quarter revenue grew 55% year-on-year to $168.8 million, with infrastructure becoming the largest revenue category after growing 145% year-on-year, driven by production ramps of the Keystone product family for 400-gig and 800-gig deployments at major hyperscale customers. CFO Steven Litchfield said the company expects growth from all four business segments in the third quarter, with particular strength in infrastructure, and guided non-GAAP gross margin to a range of 58.5% to 61.5% of revenue. The company also reported GAAP EPS of $0.02 per share and non-GAAP EPS of $0.35 per share for the second quarter.

MaxLinear is increasingly tied to several infrastructure transitions at once, including AI networking, optical bandwidth upgrades, fiber access and next-generation broadband standards. Infrastructure revenues surged 136% year over year in the first quarter of 2026, driven by production ramps in optical data center platforms, and the company is pushing into the 1.6T upgrade cycle with its Rushmore PAM4 DSP and Washington transimpedance amplifier, with production ramps expected to begin in late 2026. In broadband, MXL is executing large-scale single-chip fiber passive optical network and Wi-Fi 7 gateway deployments with a second major North American Tier 1 operator, expected in the second half of 2026, while Ultra DOCSIS 3.1 and DOCSIS 4.0 programs are expected to contribute into 2027. Non-GAAP gross margin was 59.5% in the first quarter of 2026, with second-quarter guidance of 58-61%, and the company expects infrastructure growth to support margin durability through 2026 and into 2027. MaxLinear currently carries a Zacks Rank #3 (Hold).

Small-cap stocks were the best-performing asset class in the first half of 2026, with the Russell 2000 index up 20% year to date, outperforming the S&P 500, Nasdaq, S&P 400 mid-cap index, and Russell 1000. Over the past 12 months, the Russell 2000 has returned 35%, compared to 27% for the Nasdaq and 20% for the S&P 500. The surge is driven by a rotation out of overvalued large-caps, an expanding AI supply chain benefiting small-cap semiconductor stocks like Aehr Test Systems, MaxLinear, Navitas, and Wolfspeed, a robust mergers and acquisitions market, and small-cap earnings expected to grow 38% to 48% in 2026, roughly double the S&P 500's rate. While declining rates have helped, potential Federal Reserve rate hikes and inherent volatility pose risks, making a small-cap ETF a prudent choice. An actively managed option like the Fidelity Enhanced Small-Cap Core ETF, up 26% year to date, offers diversified exposure.

MaxLinear is expected to see favorable contributions from four end markets in its upcoming second-quarter 2026 earnings report. Infrastructure, now the company's largest revenue category, remains the primary growth driver as hyperscale customers rapidly scale AI-centric architectures, with management anticipating a step-up in data center revenue beginning in the second quarter and further upside into 2027. The Keystone PAM4 DSP optical transceiver platform is ramping at multiple major hyperscale customers across the United States and Asia, supporting 400G and 800G deployments, while the Panther hardware storage accelerator SoC family gains traction with rising design wins among Tier 1 network appliance and cloud service providers. In Broadband and Connectivity, MaxLinear is advancing large-scale deployments of single-chip fiber PON and Wi-Fi 7 gateway platforms with a second major Tier 1 North American service provider, with acceleration expected in Europe later this year. The Industrial and multi-market segment is also likely to benefit from increased shipments of high-performance analog products.

The AI chip supply chain is facing a critical bottleneck at the manufacturing and testing layer, where optical interconnect scaling and silicon photonics capacity are emerging as key constraints on AI data center buildout. Credo Technology shifted its fiscal 2027 growth outlook to more than 80% year-over-year revenue growth, with over $600 million expected from its optical portfolio, while MaxLinear raised its 2026 optical data center revenue target to $150 million to $170 million. Fabrinet described strong data center interconnect growth trends alongside near-term supply constraints impacting datacom shipments, and Advantest announced a partnership with OpenLight to develop silicon photonics test solutions for high-volume manufacturing. ClassOne Technology reported record Solstice S8 orders from Applied Optoelectronics tied to the expansion of 6-inch InP production for optical interconnect applications. Equipment suppliers, test solution providers, and contract manufacturers all play roles in determining how quickly optical interconnect technology can reach high-volume production.

MaxLinear has emerged as the stronger investment choice over Qualcomm, driven by accelerating optical data center momentum and a 382% year-to-date share price surge. MaxLinear's first-quarter 2026 infrastructure revenue grew 136% year over year, and management raised its 2026 optical data center revenue outlook to the $150-$170 million range. The company's Keystone PAM4 DSP platform is ramping at multiple hyperscale customers, while its Panther storage accelerator SoC family is expected to at least double revenues in 2026. Qualcomm's automotive revenues rose 38% year over year in its fiscal second quarter, but handset revenues declined 13% amid cautious OEM build plans and inventory drawdowns in China. MaxLinear's 2026 EPS estimate has been revised upward to $1.33, implying 329% growth, while Qualcomm's fiscal 2026 EPS estimate has moved downward to $10.80, a 10.2% decline. MaxLinear carries a Zacks Rank #2 (Buy) and Qualcomm a Zacks Rank #3 (Hold).