Marvell MRVL Pre-Earnings Aug 26: Google Custom Silicon $120B Agreement, Q1 $2.418B, Q2 $2.70B Guidance, Aug 27 Report

TradingKey - Marvell Technology announced its transformative agreement with Google and expectations around it minutes before its fiscal Q2 earnings report on August 27. On August 19, Marvell filed an SEC document disclosing its agreement with Google, which was signed on July 29. These details mentioned a new agreement regarding the design of custom AI accelerators, storage controllers, network interface controllers, memory controllers, as well as near-memory computational units that are meant to complement Google’s TPU ecosystem. Google received a warrant to purchase 58.97M MRVL shares at a price of $206.58 (a value of roughly $12.2B if exercised).

The structure is unique in this case. About 97.7% of the warrant vests in 240 equal tranches (approx 240,000 shares each), one for every $500M of Custom Products revenue from FY27 Q3 through FY33; the remaining around 1.4M shares (approx 2.3%) vest on a time basis in the first year. This suggests the potential of almost $120B, although the company may not meet its target. Regardless, this agreement provides more visibility lenghth-wise. After the announcement on August 19, MRVL stock increased by 8%.

Marvell Technology projected revenues to reach $2.418B for Q1 of FY2027 at a 28% increase from the same quarter in the previous fiscal year, with non-GAAP EPS of $0.80. For Q2, they expect an increase of 35% to reach $2.70B. There was a 27% year-over-year increase in the Data Center. On the new agreement regarding the design of AI storage, CXL, and support of Marvell’s optical products (announced on August 4), as well as other developments, including the acquisition of Celestial AI and XConn earlier this year, as well as positive developments regarding Marvell’s potential long-term spending agreement with Google, earnings will provide a clearer picture of the performance of the Data Center, gross margin, management’s focus around the potential of the Google agreement, and their outlook for the third fiscal quarter of 2027.

Google Custom Silicon Agreement (August 19): $120B Revenue Potential Through FY2033

According to the August 19 SEC filing, Marvell has expanded its commercial partnership with Google for custom semiconductors in the Tensor Processing Unit (TPU) ecosystem. The products mentioned in the deal include AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory compute. The warrant issued by Google is for 58.97M shares at a strike price of $206.58, which translates to an exercise value of around $12.2B. The warrant will vest in 240 equal tranches, of which one tranche is expected to vest for every $500M of Custom Products revenue in FY27 Q3 through FY33.

This could potentially create a $120B opportunity for Marvell, though there is no guarantee that the full possibility will become a reality. Marvell has seen a post-disclosure gain of around +8%, while Broadcom has lost around -1.6%, suggesting for Google potentially beginning to diversify its custom-AI supply chain. Considering that Google is Marvell’s largest customer, this custom silicon deal increases revenue visibility, but also increases the customer risk in the agreement.

Q1 FY2027: Record $2.418B Revenue (+28% YoY), Data Center +27%

For Q1 FY2027, Marvell reported record $2.418B revenue (+28% YoY) with $18M better than expected. GAAP gross margin was 52.1% and non-GAAP gross margin was 58.9%. GAAP net income was $34.5M or $0.04 per share and non-GAAP net income was $718M or $0.80 per share. Marvell also set a record with Operating Cash Flow of $638.8M. Data Center revenue was up 27% YoY (with growth in electro-optics, custom silicon, storage, switching) and Communications revenue was up 29% (with growth driven by normalized inventory). AI-based infrastructure is the main driver for broad-based growth.

Q2 Guidance: $2.70B (+35% YoY, +12% Seq), Acceleration Continues

Marvell expects Q2 revenue to be in the range of $2.70B (+35% YoY and +12% sequentially), with a target gross margin range of 52.1%-53.1% GAAP and 58.25%-59.25% non-GAAP, respectively. This implies a GAAP EPS of $0.37 (±$0.05) and non-GAAP EPS of $0.93 (±$0.05). CEO Matt Murphy (May) is also expecting Marvell to experience annual revenue growth in the range of around 40% throughout FY2027, largely driven by exceptional AI bookings. This is primarily expected to be driven by demand for 800G/1.6T optical, 51.2T Ethernet and optical interconnect, as well as data center products and custom XPU silicon.

AI Memory Infrastructure: Storage/CXL/Optical Shared Memory (August 4)

Aug 4: Marvell introduced AI storage, rack-scale CXL memory expansion, pod-level optical shared memory for agentic AI inference. Bravera SC6 PCIe 6.0 SSD controller for AI storage (doubles PCIe 5.0 performance, sampling Q4 2026). Structera CXL technology pools memory across systems. Photonic Fabric creates shared-memory tiers across racks (claim: 32TB warm KV cache, 2-3x token throughput within power envelope). Solves memory issues with AI accelerators; provides Marvell with new opportunities outside of the competition with processors.

Celestial AI + XConn Acquisitions (February): Photonic/CXL Capabilities

Feb 2026: Marvell completed acquisitions of Celestial AI (photonic interconnect for data movement efficiency between compute/memory) and XConn Technologies (CXL and PCIe switching). Both will be reported in Q1 FY2027. The acquisitions align with Marvell strategies to reduce bottlenecks to accelerate the development of AI systems, rather than focusing on optimizing processors. With the increasing size of AI clusters, the networking, memory, optics, and custom silicon infrastructure will grow in value along with an increase in GPU spending.

Technical: $240.42, Breakout $252.83, Recovery from $160 Low

MRVL trading $240.42. Broke previous descending channel and began to form higher lows above ascending trendline (improving structure). Moving averages $222.75, $219.77 supportive. RSI ~58 (aligned with signal line, buyers in control, not overbought). Resistance $240.76, $252.83 (key breakout level).

Marvell Price Chart - Source: Tradingview

Break above $252.83 targets $275, $298.38. Support $220-$223 (moving average cluster), $204.42 (critical). Bullish above $220.

Key Levels

• Support: $220-$223 (moving averages), $204.42 (critical)
• Resistance: $240.76, $252.83 (key breakout), $275, $298.38 (targets)
• Current position: Recovery from $160 July low, constructive structure above $220

Bottom Line: Google Deal Historic, Q2 Acceleration Test Tomorrow

MRVL Aug 26: Google deal disclosed Aug 19 ($120B potential FY27 Q3-FY33, 58.97M warrant). Q1 $2.418B (+28%), Q2 guidance $2.70B (+35%), Data Center +27%. AI storage/CXL/optical Aug 4. Earnings Aug 27 1:45 PM PT.

For investors: Marvell Technologies wins a deal with Google that utilizes Marvell’s custom silicon design. This is a premium design that is valued at up to $120B through FY2033 subject to the achievement of certain milestones. This deal provides Marvell Technologies with long-term visibility and justifies premium multiple valuations. There are potential risks from customer concentration due to the significant revenue contribution from Google, execution of complex custom chips, difficulty with acquisition integration, competitive pressure from Broadcom, uncertainty of spending on AI from the hyperscale cloud companies, and the sustained nature of AI spending. 

Earnings call tomorrow is critical for the company's fiscal second quarter. This is because investors will closely watch revenue for FY 2022 (a consensus estimate is $2.7B), the Data Center business, trend in gross margin, guidance for FY 2023, and the management team’s comments about the Google deployment timeline. Google closed up around 9% on August 19th along with easing bond yields which is positive from a risk on perspective. Potential remains for a breakout of $252.83 with a target of between $275-$298. Analysis provided is not a recommendation to buy or sell a security.