Marvell shares fall as investors question timing of Google AI deal

Marvell Technology shares fell sharply on Friday, August 28, despite the chipmaker reporting record quarterly revenue and raising its forecasts for the next two fiscal years. The market reaction showed that investors were focused less on the latest results than on when Marvell’s expanded relationship with Google may produce substantial revenue.

Shares fell more than 8% in early trading Friday after declining more than 6% in after-hours trading following Marvell’s earnings release on Thursday, August 27. The early-trading move was not a final closing result.

Record revenue led by data-center demand

Marvell reported fiscal second-quarter 2027 revenue of $2.739 billion, a record for the company and a 37% increase from a year earlier. Data-center revenue reached $2.17 billion, up 46% year over year and representing about 79% of total revenue.

The company reported GAAP net income of $308 million, or 33 cents per diluted share. On a non-GAAP basis, diluted earnings were 94 cents per share. Marvell also reported $605.5 million in operating cash flow. The GAAP and adjusted figures are different measures of profitability, and the non-GAAP result should not be treated as the company’s sole profit measure.

The results reflect continued demand for components used in artificial-intelligence infrastructure and other data-center systems. But strong growth has also raised investor expectations for semiconductor companies supplying that buildout.

Forecasts moved higher

Marvell forecast fiscal third-quarter revenue of approximately $3.15 billion, plus or minus 5%.

The company also raised its fiscal 2027 revenue outlook to approximately $12 billion and its fiscal 2028 outlook to approximately $18 billion. Marvell said fiscal 2028 revenue is now expected to grow about 50% year over year, compared with its previous outlook for growth of approximately 45%.

Those are management forecasts, not reported results. Reuters reported that the higher outlooks were overshadowed by questions about how quickly revenue from the Google agreement would begin contributing meaningfully. That helps explain why the share-price reaction diverged from the quarterly numbers.

Google deal creates a timing question

Marvell’s expanded custom-chip agreement with Google was signed July 29, 2026. A related warrant was issued August 18, according to the company’s Form 8-K filed with the Securities and Exchange Commission.

The filing describes a warrant for up to 58,970,907 Marvell shares, with an exercise price of $206.58 per share. Of those shares, 1,360,867 are time-based warrant shares. The remaining shares vest in tranches tied to discretionary purchases by Google and its affiliates, with one tranche for each $500 million in qualifying custom-products revenue, according to the filing.

The warrant does not mean Google has exercised it, and it does not mean all of the shares have vested.

Marvell’s management said some Google-related revenue is already reflected in its fiscal 2027 and fiscal 2028 targets. The company also indicated that the contribution should become more significant in fiscal 2029. Reuters reported that the agreement could generate as much as $120 billion in revenue through fiscal 2033, but that figure is a potential outcome rather than booked or guaranteed revenue.

What investors will watch next

The reaction is not proof that investors rejected Marvell’s broader outlook. It more narrowly reflects questions about the timing and scale of Google-related growth against elevated expectations for AI infrastructure spending.

Marvell has scheduled an investor day for October 6. Investors will likely seek more detail there on custom-chip growth, customer concentration, supply capacity and the company’s long-term targets.

For most consumers, the results are unlikely to produce an immediate direct change. They matter primarily because Marvell supplies technology used in the data centers and AI systems supporting expanding digital services. The company’s performance is also another indicator of how quickly spending on AI infrastructure is translating into revenue for the suppliers behind it.

Sources

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