Marvell beats forecasts, shares slip as growth outlook underwhelms

Marvell Technology exceeded expectations with an increase in revenue forecasts for fiscal years 2027 and 2028, but its shares dropped by over 6 percent after hours on Thursday. The decline was driven by concerns over the timing of revenue from a major new AI chip agreement with Google, which the company signed despite not providing a meaningful increase to its long-term revenue outlook.

The custom chip deal with Alphabet's Google could bring in $120 billion in revenue through fiscal 2033, making Google one of the company's biggest investors with an up to $12.2 billion stake. During a post-earnings call, Marvell CEO Matt Murphy explained that the company's custom revenue targets through fiscal 2028 already accounted for some of the Google-related revenue, with more significant contribution expected in fiscal 2029.

However, he did not provide a new revenue target, instead deferring details to an investor day scheduled for October 6. Analysts noted that expectations for custom AI accelerator projects were very high, but these expectations were proving difficult to meet, with many companies, including Marvell, seeing negative reactions after their earnings reports.