Marvell Shares Fall Despite Raised Forecasts Amid Google Deal Uncertainty

Marvell Technology's shares fell by over 6% after hours on Thursday despite raising its annual forecasts. The chipmaker announced that it expects revenue to grow about 45% in fiscal 2027 to around $12 billion, up from its previous forecast of about $11.5 billion. This growth is largely due to increased data-center revenue.

The company also forecasted fiscal 2028 revenue of approximately $18 billion, surpassing its prior target of about $16.5 billion. However, investors were disappointed by the lack of a meaningful increase in Marvell's long-term revenue outlook despite signing a major AI chip agreement with Google.

Marvell struck a custom chip deal with Alphabet's Google that could bring in $120 billion in revenue through fiscal 2033 and make the search giant one of its biggest investors with an up to $12.2 billion stake. CEO Matt Murphy explained that the company's custom revenue targets through fiscal 2028 already reflected some of this revenue, which would contribute much more significantly in fiscal 2029.

Custom-chip revenue is expected to more than double next year, according to Murphy, with an 'upside bias' to its prior $10 billion-plus fiscal 2029 target. He declined to provide a new target, deferring details to the company's investor day scheduled for October 6.