Marvell Stock Drops on Google Warrant Despite $120 Billion Custom Revenue Potential

EarningsM&A · Partnership Impact 4
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Summary · why it matters

Marvell Technology shares fell 10.28% to $216.62 despite an earnings beat, as traders misread the expanded Google custom silicon agreement, which includes a warrant allowing Google to acquire up to 7% of Marvell shares as purchase milestones are met. The deal could generate up to $120 billion in cumulative custom revenue for Marvell through fiscal 2033, covering AI inference accelerators, storage controllers, network interface controllers, and memory controllers, so Marvell need not unseat Broadcom's flagship TPU to capture tens of billions in AI buildout spend. In Q2 FY2027, Marvell reported revenue of $2.739 billion, up 36.55% year over year, with non-GAAP EPS of $0.94, and raised FY2027 revenue guidance to roughly $12 billion with FY2028 growth of about 50%. Wall Street's consensus target is $278.89, implying 29% upside, with 38 of 43 analysts rating the stock Buy or Strong Buy and zero Sells. Risks include a high forward P/E of 60, a beta of 2.246, and a concentration of revenue from a few hyperscalers, but management expects custom revenue to more than double in fiscal 2028 and step higher in fiscal 2029, with an Investor Day on October 6, 2026, potentially resetting the long-term operating model.

Impact on stocks 3

Artificial Intelligence± Mixed · 3 stocks
Marvell Technology Group Ltd
MRVL
▼ NegativeCapitalrelevance

Shares fell 10.28% despite earnings beat due to misreading of Google warrant, which allows Google to acquire up to 7% of Marvell shares.

Alphabet Inc Class C
GOOG
▲ PositiveDemandrelevance

Google's expanded custom silicon agreement with Marvell indicates increased demand for custom AI chips, benefiting Alphabet's AI infrastructure.

Theme Impact 3

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