Google Warrant Deal Adds $6.15 to Marvell Earnings

Marvell Technology MRVL has seen its shares drawn into fresh estimates following a warrant agreement with Alphabet's GOOGL Google. The deal, which could unlock significant revenue opportunities, is expected to add $6.15 to earnings per share, according to Barclays.

The investment bank estimated that the warrant agreement could bring in $120 billion in revenue by fiscal 2033 if all warrants are exercised. This figure is split over roughly six and a half years at an annual rate of around $18.5 billion, with Marvell's ASIC business operating at a 35% margin.

Barclays believes the revenue will be backend loaded, but notes that there is no guarantee the warrant tranches will be met in full. The bank also views this as a Google effort to develop a more tailored inference solution using Marvell intellectual property rather than relying on Tensor Processing Units (TPUs).

In related news, Barclays suggests that Broadcom (AVGO) will remain the majority TPU supplier under its existing agreement with Google.