Marvell Stock Takes Hit as Investors Seek Clarity on Google Deal Payoff

Marvell Technology's stock price dropped by more than 8% to $221.6 in early trading on Friday as investors searched for signs of long-term growth beyond the company's solid quarterly results.

The chip designer has been a market favorite due to its ties to the AI spending boom, with Big Tech companies racing to adopt custom chips for cost efficiency and performance. However, with AI spending set to top $740 billion this year, investors had high expectations for Marvell's performance.

Marvell's higher revenue forecasts for fiscal years 2027 and 2028 were overshadowed by concerns over the contribution of its newly announced Google custom-chip deal, which could generate up to $120 billion in revenue through fiscal 2033. Analysts at Morgan Stanley said that expectations were already reflected in the company's prior guidance.

CEO Matt Murphy stated that Marvell's custom revenue targets through fiscal year 2028 already accounted for some Google-related revenue and would contribute much more significantly in fiscal year 2029.