Following Marvell Technology's announcement of an expanded semiconductor collaboration with Alphabet, Wall Street analysts have widely characterized the development as a "significant positive" for the company led by Matt Murphy. The news triggered a sharp rally in Marvell Technology's stock price on Wednesday.
Under the expanded framework, Marvell Technology will work alongside Google to develop a "comprehensive custom chip program covering the TPU ecosystem," encompassing products such as AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory computing solutions. In recent years, demand for custom chips like Google's Tensor Processing Units (TPUs) for AI workloads has surged as enterprises seek alternatives to Nvidia's expensive graphics processing units (GPUs).
RBC Capital Markets analyst Srini Pajjuri noted in a client report that Marvell Technology had previously collaborated with Google on XPU supporting solutions, including products like CXL and NIC. He further stated that despite prior unconfirmed rumors about the "Frozen v2" project, this 8-K filing marks the first official confirmation from Google that Marvell Technology is developing AI accelerators for it. This validates Marvell Technology's expanding role in custom silicon for hyperscale customers, following similar partnerships with Amazon and Microsoft.
Looking deeper, Pajjuri projects that Google will source approximately $80 billion to $90 billion worth of TPUs from Broadcom and MediaTek next year. While it remains unclear whether Marvell Technology will capture a portion of that existing volume or expand the overall market, the partnership clearly represents a long-term "major positive" for the company. Pajjuri maintains an "Outperform" rating on Marvell Technology.
Wells Fargo analyst Aaron Rakers also views the collaboration favorably, calling it an "incremental positive worth watching" for Marvell Technology. Rakers reiterates an "Outperform" rating with a price target of $240 per share.
As part of the transaction, Marvell Technology granted Google a warrant on August 18, allowing the tech giant to purchase up to 58.97 million shares at an exercise price of $206.58 per share. The company entered into a commercial agreement with Google on July 29 to supply custom chip products. During the first year following the agreement, 1,360,867 warrant shares will vest each quarter. The remaining shares will vest based on "discretionary purchases" from Marvell Technology's fiscal third quarter of 2027 through the end of fiscal 2033, with tranches vesting each time co-developed products generate $500 million in revenue.