Marvell-Google AI Chip Partnership Could Bring $120 Billion in Long-Term Revenue

Marvell Technology Group Ltd. shares received fresh analyst commentary on Friday after the company raised its revenue outlook for fiscal 2027 and fiscal 2028.

Rosenblatt analysts reiterated a Buy rating and a $300 price target, based on 28 times its fiscal 2029 earnings per share framework. Needham raised its price target from $270 to $300, maintaining a Buy rating, based on roughly 30 times its calendar 2028 non-GAAP EPS estimate of $10.25.

Despite record results, Marvell shares fell on Friday as investors had expected more after the stock surged over 220% in the past year.

The key concern is that rapid growth in lower-margin custom AI chips is temporarily pressuring gross margins, while major new AI deals like the one with Google are expected to make more meaningful contributions only later.

In short, the AI business is strengthening, but investors are now demanding faster earnings growth and believe most of the good news is already priced into the stock.

Revenue Outlook Raised

Management raised its fiscal 2027 and fiscal 2028 revenue outlooks by $500 million and $1.5 billion, respectively, to approximately $12 billion and $18 billion. Needham noted that management expects fiscal 2028 revenue to grow over 50% year-over-year, up from a prior outlook of 45%.

Data Center Segment Drives Growth

Rosenblatt attributed the growth to scale-out interconnect, switching, and custom chip capacity ramps in the second half of fiscal 2027.

Needham stated that it now expects data center revenue to grow over 60% year-over-year in fiscal 2028.

Google Agreement Details

Needham noted that if all milestones under Marvell's previously announced commercial agreement with Google are achieved, it could represent up to $120 billion in revenue over the next six years.

Analyst Day Set for October

Rosenblatt referenced Marvell's analyst day scheduled for early October, where management is expected to provide more details on long-term revenue and margin targets.

MRVL Stock Movement: At the time of writing on Friday, Marvell Technology shares were down 9.96% at $217.41.