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Google's $120B Chip Pact: Marvell Sees Delayed Impact
28 Aug
Summary
- Marvell forecasts $12 billion revenue for fiscal 2027, up from $11.5 billion.
- A Google custom-chip deal could yield $120 billion through fiscal 2033.
- Significant revenue impact from Google is expected starting fiscal 2029.
Marvell Technology experienced a stock decline of over 7% in early trading due to investor focus on the delayed revenue from its enhanced Google AI chip collaboration. The company has revised its revenue projections upwards, now expecting approximately $12 billion for fiscal year 2027, an increase from the prior $11.5 billion forecast. Its outlook for fiscal year 2028 has also been raised to about $18 billion, up from $16.5 billion.
These updated forecasts follow Marvell securing a significant custom-chip agreement with Alphabet's Google. This deal has the potential to generate substantial revenue, estimated at up to $120 billion, extending through fiscal year 2033. However, Marvell's Chief Executive has indicated that the program's larger financial impact is not expected to materialize until fiscal year 2029. In the second quarter, Marvell reported revenue of $2.74 billion, marking a 37% year-over-year increase, with adjusted earnings at 94 cents per share.
