Marvell Technology expands custom AI chip deal with Google

Marvell Technology has entered an expanded agreement with Google to develop custom AI chips, including AI inference accelerators, storage solutions, and networking components for Google’s Tensor Processing Unit (TPU) ecosystem. As part of this deal, Marvell issued a warrant allowing Google to purchase up to 58.97 million shares at $206.58 each through August 2033. If fully exercised, the warrant would be worth approximately $12.18 billion, potentially making Google Marvell’s fifth-largest investor.

The warrant's vesting is tied to revenue performance: one tranche unlocks for every $500 million in custom-product revenue generated by Google through fiscal 2033. While the agreement was signed in late July, the financial impact on Marvell's upcoming fiscal second-quarter 2027 results is expected to be minimal, as most revenue recognition begins in August 2026.

Following the announcement, Wall Street analysts have reacted positively. Wells Fargo raised its 12-month price target for Marvell from $240 to $310, and Rosenblatt Securities increased its target to $300. Analysts are closely watching Marvell's fiscal second-quarter earnings, with consensus estimates projecting revenue of $2.71 billion, a 35% increase year-over-year.