Marvell boosts its forecasts, but the stock slides as Wall Street wonders if there's more to the story

By Britney Nguyen

Analysts are crunching the numbers on Marvell's recently announced Google deal and how much fresh upside it really offers

Marvell's stock was down in after-hours trading Thursday.

Marvell Technology just said it is boosting its annual forecast, but so far investors are shrugging that off.

Demand for artificial-intelligence-related offerings looks "exceptionally robust," CEO Matt Murphy said in a statement Thursday. He added that Marvell (MRVL) expects its revenue growth to accelerate through the rest of its current fiscal year from the 37% rate that the company posted for its latest quarter.

Against that backdrop, the company is lifting its revenue guidance for both fiscal 2027, which is ongoing, and fiscal 2028. The company now expects overall revenue to grow 45% to about $12 billion in fiscal 2027, before reaching $18 billion in fiscal 2028. That is up from previous guidance calling for $11.5 billion in fiscal 2027 and $16.5 billion in fiscal 2028.

Shares, though, fell 7.8% lower in Thursday's extended session, with declines building throughout the earnings call.

Investors have been excited recently about Marvell's recently expanded partnership with Google, through which the technology giant got a warrant to purchase Marvell shares and the companies agreed to work together on Google's custom-chip program.

But on the earnings call, analysts tried to unpack the size of the potential upside from this new agreement - as well as whether some of the opportunity had already been captured in Marvell's financial projections.

"In terms of the impact of the new warrant agreement, revenue from programs covered by the agreement through fiscal 2028 is already reflected in the overall custom revenue target," management said on the call.

The "big impact" will be coming more in fiscal 2029 and beyond, according to management.

The results

Marvell on Thursday reported revenue of $2.7 billion for the July quarter, in line with expectations from analysts tracked by FactSet. Adjusted earnings of 94 cents per share for the fiscal second quarter were just a penny above the consensus view.

Murphy said strong demand for the company's data-center products drove the quarter's results, with revenue there growing 46% from the previous year.

Within Marvell's data-center portfolio, Murphy said demand is strong for its connectivity offerings. He also expects that the company's custom-chip business will see "a significant acceleration" starting in the second half of fiscal 2027.

For the October quarter, Marvell is forecasting revenue of $3.15 billion at the midpoint, which is above the FactSet consensus for $3 billion. The midpoint of management's outlook for adjusted EPS of $1.10 came in above estimates for $1.08.

Marvell shares had nearly tripled on the year heading into earnings.

Ahead of the report, Jefferies analyst Blayne Curtis said Marvell's "story has materially improved" given a report saying that its custom-chip customer Microsoft (MSFT) is planning to introduce its new Maia 300 chip later this year.

He also pointed to Marvell's expansion of its agreement with Alphabet (GOOGL) (GOOG) earlier this month. The companies will co-develop products in Google's custom-chip ecosystem, including inference accelerators and storage controllers.

-Britney Nguyen

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08-27-26 2020ET