Marvell's $120B Google Deal: Custom AI Chip Growth Story

Marvell Technology has been one of the biggest beneficiaries of the data center boom, with revenue rising 36% year over year in its most recent quarter. Now the company is deepening its ties to the world's largest cloud builders through custom AI silicon deals that could reshape its growth trajectory.

On its August 27, 2026 earnings call, Marvell raised its fiscal 2028 revenue outlook to $18 billion, with custom silicon expected to more than double. The company now has more than 20 custom design wins across Amazon, Alphabet, Microsoft, and Meta Platforms, but a recent agreement with Alphabet's Google stands out as the most significant yet.

In July, Marvell signed a major deal with Google spanning accelerators, storage controllers, network interface controllers, and memory controllers. These custom silicon programs will tie into Google's TPU ecosystem, and the agreement amounts to $120 billion in cumulative total revenue over six years, assuming certain milestones are met.

Marvell expects fiscal 2027 revenue to reach $12 billion, up from $8 billion in fiscal 2026. CEO Matthew Murphy said revenue should pick up in the second half of this year, with custom silicon more than doubling year over year in fiscal 2028 before accelerating significantly in fiscal 2029. Since June 2025, Murphy has guided to more than $10 billion of custom silicon revenue by fiscal 2029, and he noted the Google agreement greatly increases that opportunity, with some revenue potentially starting in 2029.

The four largest hyperscalers are expected to spend roughly $745 billion this year on data center capacity, and a growing share of that spending is shifting toward custom AI chips designed to manage costs and power consumption. Marvell is positioning itself as a key supplier for that shift, selling not just the compute chip but the surrounding components like networking, controllers, and memory interfaces.

Selling the full stack can be lucrative and support strong earnings growth. While a more custom-chip mix could pressure margins, management expects its adjusted operating margin to increase, exiting the current year between 38% and 40%, reaching the top end next year, and growing operating expenses more slowly than revenue.

Research from Cathie Wood's team at Ark Invest expects spending on custom chips to grow faster than overall compute spending, which would be a direct tailwind for Marvell. The Google deal is particularly important because it validates Marvell's custom silicon capabilities at the highest level and could lead to similar agreements with other hyperscalers.

However, the stock is priced for perfection at a forward price-to-earnings ratio of 60. If Marvell delivers on its long-term revenue targets, shares could have meaningful upside, with analysts projecting earnings growth of roughly 46% annually over the next several years. The upcoming Investor Day on October 6, 2026, is a near-term catalyst where management may raise its long-term custom silicon outlook, potentially lifting the stock.