Marvell Catches Big Fish with Google Chip Deal

Marvell Technology has secured a major partnership with Google, which will see the tech giant receive custom chips from the company. The deal includes artificial intelligence inference accelerators and other data center chips, with Google set to receive warrants worth up to 7% of Marvell's total shares if it spends $120 billion through fiscal 2033.

This is a significant win for Marvell, as it expands its long-term AI growth opportunity alongside existing programs at AWS and Microsoft. The deal also marks another endorsement of Marvell's custom silicon strategy, which has been gaining traction with partnerships like Nvidia and now Google.

For Google, this agreement continues the diversification of its silicon suppliers, moving away from a reliance on Broadcom in the TPU program. With MediaTek and AMD also stepping into the market, it appears that the industry is shifting towards multi-sourcing rather than a zero-sum game.

The partnership has seen Morningstar raise its fair value estimate for Marvell to $270 per share from $235, factoring in Google revenue previously not included in forecasts. Shares rose 6% intraday and are now considered modestly undervalued.