Shares of Marvell Technology plunged roughly 8% in premarket trading Friday despite what looked, on paper, like a clean earnings win. The chipmaker posted record second-quarter revenue of $2.74 billion, up 37% year-over-year, with adjusted earnings of $0.94 per share — both above Wall Street estimates. The problem wasn't what Marvell delivered. It was when the biggest payoff from its blockbuster Google partnership would actually show up.
The Google Deal Is Huge — But the Payday Is Two Years Away
Marvell secured a custom-chip deal with Google that could generate up to $120 billion in revenue through fiscal 2033.
Investors had treated the agreement as a reason to raise Marvell's growth trajectory immediately, but management indicated much of the existing fiscal 2028 benefit was already embedded in forecasts — meaning the market had pulled part of Google's future success into the current valuation before the revenue arrived.
CEO Matt Murphy said the deal would contribute much more significantly in fiscal 2029, when custom-chip revenue would carry "upside bias" to a prior $10 billion-plus target.
Raised Guidance Still Wasn't Enough for a Stock Up 184% This Year
Marvell lifted its fiscal 2027 revenue outlook to roughly $12 billion (45% growth) and its fiscal 2028 target to approximately $18 billion (50% growth). Normally, that upgrade would reward shareholders. But those upgrades were not enough for a stock that had already gained about 184% in 2026.
Marvell trades at a forward price-to-earnings ratio of roughly 58×, nearly double rival Broadcom's 32×. At that premium, even a beat-and-raise quarter invites profit-taking if the next catalyst is deferred.
The Data Center Engine Keeps Accelerating — For Now
Data center revenue hit $2.17 billion, surging 46% year-over-year and now representing 79% of total sales.
Marvell guided fiscal Q3 revenue to $3.15 billion, up over 50% year-over-year. The core AI infrastructure business — networking chips, optical components, and switching gear — is firing. But with Google holding warrants to buy roughly 59 million Marvell shares at $206.58 , investors also face potential dilution of about 7% of the company if revenue milestones are hit.
What Comes Next: Investor Day or Bust
Murphy declined to provide a new long-term revenue target, deferring details to Marvell's investor day scheduled for October 6. Until then, the stock sits in an uncomfortable gap: the business fundamentals are strong, but the premium valuation demands faster proof that Google's billions translate into Marvell's bottom line. Patience, in this market, doesn't come cheap.