MRVL Stock Jumps After Google Gets A $12B Ticket To Own 7% Of Marvell — With Strings Attached

• Google received a warrant to purchase up to 58.97 million Marvell shares at $206.58 each, representing roughly 7% of the company.
• Most of the warrant is tied to revenue generated through the partnership, with one tranche vesting for every $500 million in eligible custom-products revenue.
• The agreement covers AI inference accelerators, storage controllers, networking, memory interfaces and near-memory compute.

Marvell Technology (MRVL) shares surged Wednesday morning after the company disclosed a formal commercial agreement with Google parent Alphabet (GOOG, GOOGL) that would give Google a warrant to buy roughly $12.2 billion worth of Marvell shares.

MRVL stock jumped over 13% in morning trade, while GOOGL shares were down around 0.6%. If gains hold, this would be an over one-month high for Marvell shares. 

MRVL was among the top trending tickers on Stocktwits at the time of writing, with retail sentiment improving to ‘extremely bullish’ from ‘bullish’ territory and chatter rising to ‘high’ from ‘normal’ levels over the past day. 

Meanwhile, Marvell rival Broadcom (AVGO) saw its shares slip. AVGO stock dipped nearly 3% in morning trade, with retail sentiment also rising to ‘extremely bullish’ from ‘bullish’ territory over the past day, accompanied by ‘high’ levels of chatter.

Broadcom currently holds more than 70% of the custom AI chip market and has forecast $100 billion in AI chip revenue by 2027.

Google Gets Potential 7% Stake In Marvell

Under the deal, Marvell issued Google a warrant to purchase up to 58.97 million shares of common stock at an exercise price of $206.58 per share, equivalent to roughly 7% of Marvell’s outstanding shares.

The warrant is structured to vest largely around the success of the partnership rather than simply over time. Only 1.36 million shares covered by the warrant will vest through equal quarterly installments during the first year. The remaining shares are tied directly to revenue generated through the partnership.

How Will The Rest Of MRVL Shares Vest?

The remaining shares are divided into 240 equal tranches running from Marvell’s third quarter of fiscal 2027 through fiscal 2033. One tranche vests for every $500 million in eligible custom-products revenue generated through Google. That means Google would need to drive significant business to Marvell before it receives most of the potential stake. 

The agreement covers a broad range of custom silicon tied to Google’s TPU roadmap. The work includes AI inference accelerators, storage controllers, network interface controllers, memory interface controllers and near-memory compute products.

Read also: Samsung Reportedly Hikes Chip Prices Amid TSMC Capacity Crunch: Nvidia, Apple, Tesla Fuel Demand

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