Marvell Poised to Raise AI Revenue Target by $2B+ on Google Deal, RBC Says
Marvell Technology (NASDAQ: MRVL) is likely to raise its fiscal 2029 AI revenue forecast by at least $2 billion, according to RBC Capital Markets. In a Monday client note, RBC credited most of that increase to Marvell’s custom chip partnership with Alphabet (NASDAQ: GOOG, GOOGL). The firm expects the higher target to come at Marvell’s October 6 investor day.
Key Points
- RBC sees Marvell raising its fiscal 2029 AI revenue forecast from more than $10 billion by at least $2 billion. Google programs account for most of the increase.
- Custom CXL chips shipped to Google could bring in about $1 billion of revenue in calendar 2028.
- RBC says Google’s warrant deal with Marvell implies about $120 billion in revenue potential over six years.
- RBC reiterated its Outperform rating and $360 price target on MRVL. The stock is up nearly 200% this year.
Google Partnership Drives the Upside at Marvell
According to RBC, Marvell already ships custom Compute Express Link (CXL) silicon to Google. RBC analysts led by Srini Pajjuri estimate that business at roughly $1 billion of revenue in calendar 2028.
On top of that, RBC expects revenue from more custom inference chip programs to start ramping in late 2027. Together, these sources support an increase of at least $2 billion to Marvell’s current fiscal 2029 AI revenue target.
The relationship already runs deep. In August, Marvell gave Google a warrant to buy up to nearly 59 million shares at $206.58 each, according to an SEC filing. Most of the warrant vests as Google makes purchases from Marvell through 2033. RBC calculates that the arrangement implies roughly $120 billion in revenue potential over six years.
Microsoft Program and New Targets Could Add More
Beyond Google, RBC expects Marvell to modestly raise its fiscal 2028 forecast for its custom XPU program with Microsoft (NASDAQ: MSFT). RBC believes the current forecast assumes $600 million to $800 million of revenue, but says demand appears to be running well above that. Pajjuri sees “room for further upside potential in coming quarters.”
In addition, Marvell is likely to set calendar 2030 targets for the size of the data center market and its share of it. RBC expects those targets to land well above the prior $94 billion market estimate and to come with higher operating margin goals. According to the analysts, the new framework could imply EPS potential of $15 to $20.
Why RBC Still Likes MRVL
RBC is keeping its estimates unchanged for now, but it remains bullish. The firm points to potential revenue growth of more than 50% over the next two to three years. It also says Marvell is one of the few semiconductor stocks in its coverage that could see revenue growth speed up in 2027 and 2028, which in RBC’s view justifies a premium valuation.
Even so, Marvell shares fell 4.3% intraday Monday, with the broader market lower.
AI Chip Peers Show Similar Strength
Marvell’s outlook matches a broader surge in AI chip demand. In August, NVIDIA (NASDAQ: NVDA) said it expects fiscal 2028 revenue to grow about 70% year over year. Earlier this month, Broadcom (NASDAQ: AVGO) forecast that its AI revenue will double in fiscal 2027 to about $115 billion. That was slightly below consensus, but Truist Securities expects Broadcom to beat it comfortably.
