Marvell CEO described a recent Google custom silicon agreement as game changing, projecting custom AI chip revenue could significantly exceed current models.
During its recent earnings call, Marvell Technology (MRVL) CEO Matt Murphy highlighted the company’s expanding customer relationships, noting they provide “a lot of upside bias” to its fiscal 2029 and beyond custom-revenue outlook. The semiconductor firm reported earnings of $0.94 per share, surpassing the consensus estimate of $0.93, while revenue came in at $2.74 billion, beating Wall Street’s expectations of $2.71 billion.
Despite the earnings beat, MRVL shares fell as much as 8% in pre-market trading, poised to erase their weekly gains. The stock was also among the top trending tickers on Stocktwits at the time of publication.
Murphy described Marvell’s agreement with Alphabet’s Google (GOOG, GOOGL) as “game-changing,” suggesting it could potentially add billions in revenue beyond existing forecasts. “This engagement and warrant is significant,” Murphy said. “It’s very broad-based.” He added that the opportunity could be “massive” for Marvell, describing its potential peak performance over the next six to six-and-a-half years as “game changing.” When initially announced, the commercial arrangement was projected to represent up to $120 billion in cumulative revenue over roughly six years, contingent on meeting various milestones. Analysts noted that dividing this figure across the period implies an annual revenue opportunity of approximately $18 billion. “Your math is not wrong,” Murphy responded. “It’s just a monster number.”
According to Murphy, the potential revenue is heavily weighted toward fiscal 2029 and beyond. “There’s a lot of upside bias in those numbers in fiscal ’29 and beyond in custom,” he said. “We should assume in that time frame that on the custom side, these numbers would be a lot larger than overall custom than anybody has been modeling so far.” While stopping short of issuing a new specific revenue target, Murphy indicated that further updates would be provided during Marvell’s Investor Day in October. The company now expects fiscal 2027 revenue of roughly $12 billion, up from its previous forecast of $11.5 billion, and fiscal 2028 revenue of approximately $18 billion, representing a $1.5 billion increase from its prior outlook.
Murphy emphasized that Marvell’s growth is not solely dependent on Google, citing “significant engagements across the customer base.” However, he noted that the Google partnership reflects a broader shift in AI infrastructure. “We’re in a monetization era,” he said. “And so this stuff really matters.” Marvell now anticipates data-center revenue to grow about 60% in fiscal 2027, revised upward from a previous forecast of roughly 50%. For fiscal 2028, the company expects data-center revenue to increase by more than 60%, driven by custom silicon, connectivity, and scale-up infrastructure. “I think there’s been doubt for years that we could even do the $8 billion to $10 billion,” Murphy said. “This should give, I think, investors comfort that we secured a pretty big set of programs.”
Following the report, Goldman Sachs analyst James Schneider raised his price target on Marvell to $220 from $195, maintaining a ‘Neutral’ rating. He cautioned that elevated expectations and a premium valuation, compounded by the recent Google announcement, could keep shares range-bound. Meanwhile, Morgan Stanley increased its price target to $246 from $224, keeping an ‘Equal Weight’ rating. The firm characterized the quarter as “solid” but noted there is little room for near-term surprises, pointing out that market expectations were already heightened following the Google relationship announcement.