Marvell Technology, Inc.

NASDAQ Global Select
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Bullish +65

Marvell and Google: Misplaced Fear Should Drive Your Purchase Decision

AI-generated analysis

📉 MRVL shares fell ~10% on news of a major Google deal, but the agreement ties equity conversion to silicon delivery rather than immediate cash dilution.

💰 Q2 FY2027 revenue reached $2.739 billion, up 36.55% year over year, with Data Center segment growing 46% YoY.

🚀 The Google agreement could generate up to $120 billion in cumulative custom revenue for MRVL through fiscal 2033.

📈 Management raised FY2027 revenue guidance to roughly $12 billion and lifted FY2028 growth expectations to about 50%.

💹 Non-GAAP operating margins expanded 180 basis points year over year to 36.6%, targeting a 38%-40% range by fiscal Q4.

📊 Wall Street consensus target is $278.89, implying ~29% upside from the current price of $216.62.

✅ Of 43 analysts covering MRVL, 38 rate it as a Buy or Strong Buy with zero Sells.

🗓️ CEO Matt Murphy expects custom revenue to increase significantly starting in fiscal year 2029.

⚠️ Risks include hyperscalers shifting to in-house silicon, potential gross margin compression below 57.5%, and execution on the custom ramp.

🔭 Key catalysts include the upcoming fiscal Q3 earnings report and an Investor Day on October 6, 2026.

Bullish Signals
  • MRVL shares dropped ~10% after announcing a massive Google deal that could unlock up to $120 billion in custom revenue through 2033.
  • Q2 FY2027 delivered $2.739B revenue (up 36.55% YoY) and non-GAAP EPS of $0.94, with Data Center now comprising 79% of total revenue.
  • Management raised FY2027 revenue guidance to ~$12B and lifted FY2028 growth expectations to roughly 50%.
  • Non-GAAP operating margins expanded to 36.6% in Q2, with a target range of 38%-40% by fiscal Q4.
  • Wall Street consensus target is $278.89, implying ~29% upside from the current price of $216.62.
  • Of 43 analysts covering MRVL, 38 rate it as a Buy or Strong Buy with zero Sells.
  • CEO Matt Murphy stated that custom revenue numbers will definitely go higher starting in FY2029.
Risk Factors
  • The stock trades at a high forward P/E of 60x and trailing P/E of 80x, reflecting premium valuation.
  • Gross margins are expected to step down to a 57.5%-58.5% range in Q3 as the custom mix rises.
  • The thesis breaks if custom revenue fails to double in FY2028 or if a hyperscaler cancels a program.
  • CEO Matt Murphy sold 7,500 shares on August 17, indicating officer dispositions rather than open-market buys.
Full Analysis
Marvell Technology (MRVL) shares dropped approximately 10% following the announcement of a significant custom silicon agreement with Google, which analysts and traders initially misinterpreted as negative dilution. However, the deal structure aligns both companies' interests, with Google warrants converting only upon Marvell's delivery of silicon, potentially unlocking up to $120 billion in cumulative custom revenue for Marvell through fiscal 2033. The company reported strong financial performance for Q2 FY2027, delivering $2.739 billion in revenue, a 36.55% year-over-year increase, and non-GAAP EPS of $0.94. Data Center revenue now accounts for 79% of total sales, growing 46% year over year, driven by demand for custom AI inference accelerators, storage controllers, and network interface controllers. Management has raised guidance, projecting FY2027 revenue near $12 billion and lifting FY2028 growth expectations to roughly 50%. Non-GAAP operating margins expanded to 36.6% in the quarter, with a target range of 38% to 40% by fiscal Q4. CEO Matt Murphy indicated that custom revenue numbers are expected to rise significantly starting in fiscal year 2029. Despite the stock trading at a forward P/E of 60x and a trailing P/E of 80x, Wall Street consensus targets imply roughly 29% upside from current levels. Of the 43 analysts covering the stock, 38 rate it as a Buy or Strong Buy. Key upcoming catalysts include the fiscal Q3 earnings report and an Investor Day scheduled for October 6, 2026.