Marvell shares slide as concerns over timing of Google AI deal revenue eclipse strong results
Computer motherboard and chip appear in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
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Aug 28 : Marvell Technology’s shares fell 8 per cent to $223.1 in premarket trading on Friday as concerns about the potential upside from its AI chip deal with Google overshadowed better-than-expected results from the semiconductor designer.
The company secured a custom-chip deal with Alphabet’s Google last week that could generate up to $120 billion in revenue through fiscal 2033 and make the search giant one of its largest shareholders.Investor focus on the timing of the deal’s revenue contribution, however, eclipsed the company’s higher revenue forecasts for fiscal years 2027 and 2028.
“Expectations were higher, mostly because of the Google deal,” analysts at Morgan Stanley said, adding that its contribution was already largely reflected in the company’s prior guidance.
CEO Matt Murphy said Marvell’s custom revenue targets through fiscal year 2028 already reflected some Google-related revenue and that it would contribute much more significantly in fiscal year 2029.
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Shares of the company have nearly tripled in value this year.
Marvell has emerged as a major winner from the AI infrastructure boom as Big Tech increasingly turns to custom chips for greater cost efficiency and performance.
“While the quarter and near-term guides weren’t overly exciting vs expectations, a combination of the GOOGL deal, prospects with Microsoft and AI connectivity upside could point to some big figures that make $20 in EPS power before the end of the decade look realistic,” Melius Research analysts said in a note.
At least five brokerages raised their price targets on Marvell following the results, with the median target of $275 implying a 13.8 per cent upside from Thursday’s close, according to LSEG data.
The company expects revenue to grow about 45 per cent in fiscal year 2027 to roughly $12 billion, up from its prior forecast of about $11.5 billion, thanks to more data-center revenue.
It also forecast fiscal 2028 revenue of about $18 billion, up from its prior target of about $16.5 billion.
Marvell trades at a premium compared to rival Broadcom, with a 12-month forward price-to-earnings ratio of 58.41 versus 32.15, according to data compiled by LSEG.
Source: Reuters
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