Marvell signs major custom silicon deal with Google, sell-side comments

Investing.com -- Marvell Technology has signed a new customer silicon agreement with Google that includes warrant provisions, according to multiple analyst reports released Wednesday.

The deal could represent up to $120 billion in cumulative revenue for Marvell over approximately 6.5 years, according to Stifel, which maintains a Buy rating on the stock. This figure would be multiples of Marvell's current revenue run rate.

Under the agreement, Google receives equity upside only if its custom silicon spending with Marvell scales, while Marvell's cost is contingent and non-cash rather than a purchase obligation, Raymond James noted. The firm maintains a Strong Buy rating on Marvell.

The agreement signals progress in Marvell's Custom franchise, driven by XPU Attach, Stifel said. The firm believes Marvell continues to compete and win large custom programs with Tier 1 customers, further establishing itself as a turnkey partner for AI infrastructure buildout.

Wolfe Research, which has an Outperform rating, said more details are needed to determine what Marvell will supply, the timing, and whether there is any overlap with products already supplied by Broadcom and Mediatek. The firm also noted that the warrant math needs clarification to understand the true revenue potential.

Raymond James said the deal aligns with its investment thesis, which has focused on an underappreciated ASIC business and stickiness of pluggable re-timed optical transceivers. The firm had previously focused on Marvell's exposure to Amazon and Microsoft and had not incorporated Google into its assumptions.

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