Marvell CEO Calls Google Deal ‘Game Changing’ – Says Custom AI Chip Revenue Could Be ‘A Lot Larger’ Than Modeled

• During the earnings call, Murphy said Marvell’s expanding customer relationships give management “a lot of upside bias” to its fiscal 2029 and beyond custom-revenue outlook.
• The company raised its fiscal 2028 revenue outlook to about $18 billion, up from $16.5 billion previously.
• Marvell expects data-center revenue to grow more than 60% in fiscal 2028, driven by custom silicon, connectivity and scale-up infrastructure.

Marvell (MRVL) CEO Matt Murphy believes that the company’s deal with Alphabet’s Google (GOOG, GOOGL) is “game-changing” and could potentially add billions of dollars in potential revenue beyond the company’s 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 and described its potential peak performance over the next six to six-and-a-half years as “game changing.”

His comments came during the earnings call, after Marvell reported earnings of $0.94 a share, above the consensus estimate of $0.93. Revenue came in at $2.74 billion, beating Wall Street’s expectations of $2.71 billion. 

Despite the beat, MRVL stock fell as much as 8% in pre-market trade, on track to wipe out its gains for the week. It was also among the top trending tickers on Stocktwits at the time of writing.

Google Deal Could Reshape Marvell’s Custom-Silicon Outlook

The scale of the Google agreement has left investors trying to determine how much incremental revenue it could generate for Marvell. When Marvell announced the deal last week, it stated that the commercial arrangement could represent up to $120 billion in cumulative revenue over roughly six years, subject to the company meeting various milestones. 

Analysts on the earnings call noted that dividing that figure across the period would imply an annual revenue opportunity of roughly $18 billion. “Your math is not wrong,” Murphy responded. “It's just a monster number”

According to him, the potential revenue is weighted toward fiscal 2029 and beyond. “There's a lot of upside bias in those numbers in fiscal '29 and beyond in custom,” Murphy 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.”

He stopped short of providing a new revenue target, and said further updates would come in October during Marvell’s Investor Day. 

Marvell Says Custom Revenue Could Exceed $10 Billion

Marvell now expects fiscal 2027 revenue of roughly $12 billion, up from its previous $11.5 billion forecast, and fiscal 2028 revenue of approximately $18 billion, up $1.5 billion from its prior outlook.

Accordng to Murphy, Marvell growth is not dependent only on Google. He said that the company has “significant engagements across the customer base.” However, the Google deal does a broader shift in AI infrastructure, according to Murphy.

“We're in a monetization era,” he said. “And so this stuff really matters.”

Marvell expects data-center revenue to grow about 60% in fiscal 2027, compared with its previous forecast of roughly 50%. For fiscal 2028, the company now expects data-center revenue to increase more than 60%.

“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.”

Wall Street Raises Price Targets On MRVL Stock

Goldman Sachs analyst James Schneider raised the price target on Marvell to $220 from $195 and kept a ‘Neutral’ rating on the shares. According to him, elevated expectations and a premium valuation with the Google deal in the backdrop could keep shares range-bound.

Morgan Stanley raised also raised its price target on Marvell to $246 from $224 and kept an ‘Equal Weight’ rating on the shares. The firm said Marvell reported a "solid quarter," but left no room for near term surprises. It noted that expectations were higher, mostly because of the Google (GOOGL) relationship announced a few days ago. 

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