Marvell Raised Its Annual Forecasts, but Its Stock Fell: Questions Remain About the Deal with Google

On August 27, U.S.-based Marvell Technology raised its sales forecasts for the current and next fiscal years, but Wall Street reacted with a sell-off. Shares of the AI chip developer fell 7.8% in after-hours trading on the Nasdaq. In over-the-counter trading in the U.S. on the morning of August 28, the decline accelerated to nearly 9%, according to Yahoo Finance. Reuters reports that investors were dissatisfied with the timeline for revenue from the new agreement with Google: they had expected confirmation that it would accelerate growth sooner.

For its current fiscal year ending in 2027, Marvell expects revenue of about $12 billion—a 45% increase from the previous year. It had previously projected approximately $11.5 billion, according to Reuters. The revenue forecast for fiscal year 2028 has been raised from $16.5 billion to $18 billion. This figure already includes revenue from some programs under an agreement with Google. Projects currently in development or just entering production will make a “much more significant” contribution in fiscal year 2029, Marvell CEO Matt Murphy said during a conference call.

Marvell’s results for the last fiscal quarter slightly exceeded expectations. Adjusted earnings rose from $0.67 a year earlier to $0.94 per share, compared with a consensus estimate of $0.94. Revenue increased 37% year-over-year to $2.74 billion, compared with a consensus estimate of $2.72 billion, according to Barron’s.

In 2026, Marvell shares became one of the most popular AI investments, according to Barron’s: since January, the stock has risen 184%. In recent weeks, the AI rally has lost steam, and investors were likely expecting a bit more from Marvell’s earnings report, the publication notes.

“Expectations are clearly getting ahead of themselves, so it’s difficult for almost everyone to move forward—perhaps with the exception of Nvidia. But even its stock initially fell after the earnings report, before the company presented a strong full-year forecast, ” says Bob O’Donnell, an analyst at TECHnalysis Research (as quoted by Reuters).

Mikhail Denislamov, an analyst at Freedom Broker, described Marvell's financial results in a column for Oninvest as "an important indicator for the AI sector, alongside Nvidia's figures."

The average target price for Marvell shares, calculated by S&P Global based on forecasts from 44 analysts, is 12% higher than the most recent closing price. The consensus rating for the stock has remained at “Buy” in recent months.

Marvell signed an agreement with Google to develop chips to the internet giant's specifications one week before the release of its financial results. The deal will enable Marvell to generate up to $120 billion in additional revenue by the end of fiscal year 2033, while Google will acquire a stake in Marvell valued at up to $12.2 billion and become one of its largest investors.

The companies are already working together on specific components of Google’s tensor processors, which are designed for AI computing. This collaboration has strengthened Marvell’s business in developing custom chips. Reuters attributes the demand for such solutions to tech giants’ desire to create their own processors—which are cheaper than Nvidia’s expensive and hard-to-find chips.

Demand is also increasing as the industry shifts from training AI models to putting them into practical use. Reuters notes that at this stage, chips designed for specific tasks may outperform general-purpose processors in terms of performance and efficiency.

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