Shares surged as Marvell Technology disclosed an expanded partnership with Google that marries custom AI chip development with a massive equity stake — a deal that signals long-term revenue confidence but demands shareholders accept real dilution risk.
• Google Earns Its Ownership Stake Only by Spending
The bulk of the warrant shares unlock only as Google hits cumulative spending thresholds. Specifically, the remaining shares vest in 240 equal tranches — one tranche for each $500 million in custom products revenue Marvell records from Google — running through the end of fiscal 2033.
Marvell has not disclosed a guaranteed $120 billion order. The full $120 billion threshold is far beyond Marvell's current annual revenue. In other words, Google doesn't get cheap stock for free — it must buy enormous volumes of chips first. If Google's purchases remain below the required thresholds, a significant portion of the warrant could expire without being exercised.
• The Deal Completes Marvell's Hyperscaler Sweep — and Rattles Broadcom
The deal gives Marvell custom AI chip partnerships at all three major U.S. hyperscalers for the first time.
Broadcom slid as much as 5.8% as Google added another chip supplier.
Broadcom holds approximately 70% of the custom AI chip co-design market — so this is a direct challenge to the incumbent, with investors clearly repricing competitive dynamics in real time.
• Dilution Is the Price Tag for Revenue Visibility
Using approximately 875.8 million current Marvell shares, the maximum 58.97 million warrant shares could create roughly 6.3% post-issuance dilution.
If fully exercised at $206.58 against a current trading price above $230, the shares would be issued at a discount to market price. But the market's reaction — a 12%+ gain — reflects the judgment that the revenue visibility created by a seven-year custom chip procurement relationship outweighs the dilution risk.
• Earnings Next Week Will Test the Hype
Marvell is set to announce its fiscal second-quarter results on August 27. Investors are seeking updated revenue guidance, insight into customer concentration, and information on the accounting value of the Google warrant.
Fiscal Q1 2027 sales hit an all-time high of $2.418 billion, or 28% year-over-year growth.
Management projects fiscal Q2 revenue at $2.7 billion. Whether management can contextualize the Google ramp alongside margins will determine if today's rally has staying power — or if it already priced in years of execution.