Shares of Marvell Technology surged as much as 13% Wednesday morning after the chipmaker disclosed an expansive new deal to build custom AI semiconductors for Google — and handed the search giant a warrant that could make it one of Marvell's largest shareholders. In early trading MRVL climbed to $243.66 , extending an already outsized 155% year-to-date advance , even as the broader chip sector sold off.
- Google Gets a Growing Stake — But Only If It Keeps Buying
Marvell issued Google a warrant to buy up to 58.97 million shares at $206.58 apiece — valued at as much as $12.2 billion if fully exercised . Here's the catch: only ~1.4 million shares vest in year one, after which the rest unlock in 240 tranches, one for every $500 million in custom chip revenue Google generates through fiscal 2033 . In plain terms, Google earns its discount stock only by spending tens of billions on Marvell's silicon. That turns a potential equity giveaway into a contractual revenue floor.
- Existing Shareholders Face Real Dilution Math
Marvell currently has about 847 million shares outstanding . If the full warrant vests, ~59 million new shares would increase the count by roughly 7%, shrinking each existing investor's slice of profits. The company itself acknowledged that "the added shares would reduce existing holders' percentage ownership." The trade-off: that dilution only happens if Google is spending at a pace implying $120 billion in cumulative chip purchases — a scenario in which Marvell's revenue would dwarf today's run rate of roughly $2.71 billion per quarter expected by analysts .
- Broadcom Feels the Squeeze
Broadcom has been the incumbent partner for Google's custom chip program through 2031 . Its shares fell 3% on the Marvell announcement . Analysts read this as a zero-sum share shift rather than an industry rising tide.
- A Playbook Marvell Has Run Before
This mirrors a similar warrant arrangement Marvell struck with Amazon Web Services in late 2024 . Marvell now holds warrant-based partnerships with two of the three largest cloud providers and also supplies custom chips to Microsoft — a position no other semiconductor company occupies. With earnings on August 27 and an investor day October 6 , management will soon face pointed questions about whether these deals deliver margin or just top-line volume bought with discounted equity.