Marvell secured a $12 billion deal with Google, though recent stock volatility has overshadowed the announcement.
Jim Cramer recently celebrated Marvell Technology’s blockbuster agreement with Google as further proof that CEO Matt Murphy continues to deliver exceptional results. Yet, Marvell’s stock shed nearly 10% following the company’s earnings call, which revealed a critical detail omitted from the initial headlines: the $12 billion Google warrant had already been incorporated into prior guidance.
On August 27, Marvell shares declined 9.96% to approximately $217, erasing a portion of their 184.54% year-to-date rally. This pullback followed a remarkable 38.39% surge over the preceding month. Against that heavily priced-in backdrop, the company’s modest 1.2% revenue beat and 1.19% earnings-per-share beat were perceived by investors as “a meet rather than a beat.” Historically, the most substantial gains in artificial intelligence silicon tend to accrue to investors who identify the opportunity early—a pattern frequently cataloged in independent research on the next generation of chip leaders.
Just two weeks prior, on August 19, Cramer reposted a CNBC headline reading, “Marvell pops 6% on AI chip deal that lets Google buy up to $12.2 billion in shares,” immediately adding his own commentary: “Matt ‘trillion dollar’ Murphy scores again.” The subsequent market reaction, however, underscored the distinction between headline-driven momentum and fundamental valuation.
During the August 27 earnings call, Murphy explicitly addressed the incremental revenue expectations surrounding the newly disclosed warrant. He stated, “In terms of the impact of the new Warrant Agreement, revenue from programs covered by the agreement through fiscal 2028 is already reflected in the overall custom revenue target we have previously provided.” In practical terms, the $12 billion figure was already baked into Marvell’s existing financial model. Management indicated that the more significant financial benefits from the Google partnership are anticipated to materialize in fiscal 2029, when Marvell’s custom chip division aims to generate between $10 billion and $11 billion in revenue. Murphy clarified, “Most of this is comprehended already in next year. The big impact would be, you know, in 29 and beyond.”
Despite the stock’s decline, Marvell’s underlying financial results remained robust. Second-quarter fiscal 2027 revenue reached a record $2.739 billion, representing a 36.55% year-over-year increase, while non-GAAP earnings per share came in at $0.94. Data center revenue surged 46% to $2.1715 billion, now constituting 79% of total sales. Capitalizing on this momentum, Murphy upgraded full-year projections: “We now expect overall Marvell revenue in fiscal 2027 to grow approximately 45% year over year to roughly $12 billion, up from our prior outlook of approximately $11.5 billion just one quarter ago.” Fiscal 2028 revenue guidance was similarly lifted to approximately $18 billion, with data center segment growth projected at more than 60% year over year. For the third quarter, management guided for revenue of $3.150 billion, plus or minus 5%, and non-GAAP EPS of $1.10, plus or minus 5 cents.
Looking ahead, Murphy directed investor attention to an October 6 investor day in New York City, promising “a very robust detailed review of how we step through the revenue not just through fiscal 29 but really out until the end of the decade.” He noted that the long-term outlook carries an “upside bias” heading into fiscal 2029.
Separately, regulatory filings show that Murphy sold 7,500 shares on August 17 at $236.08 per share, a price notably higher than Marvell’s September 1 closing value of $208.02. The filing does not specify whether the transaction was executed under a prearranged Rule 10b5-1 trading plan.
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors. He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.