Marvell’s Custom AI Silicon Deals With Hyperscalers Could Redefine Its Growth Story
The data center boom has been good for Marvell Technology (MRVL +1.47%). Revenue has accelerated over the past few years and rose 36% year over year in the most recent quarter. Now, Marvell’s newest custom chip deals with the biggest cloud builders could extend its growth runway.
On its Aug. 27, 2026, earnings call, the company raised its fiscal 2028 revenue outlook to $18 billion, with custom silicon expected to more than double. Its custom business has more than 20 design wins across Amazon, Alphabet (GOOG -1.70%)(GOOGL -1.70%), Microsoft, and Meta Platforms, but a recent deal with Alphabet could be the most significant yet.
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Marvell is embedding itself deeper into the AI supply chain
These four hyperscalers are expected to spend roughly $745 billion this year, according to The Motley Fool’s research, driven by the need for data center capacity. Those dollars should flow to suppliers like Marvell, as cloud leaders deploy custom artificial intelligence (AI) chips to manage costs and power consumption.
In July, Marvell signed a major agreement with Alphabet’s Google spanning accelerators, storage controllers, network interface controllers, and memory controllers. These custom silicon programs will tie into Google’s TPU ecosystem. Overall, the Google deal amounts to $120 billion in cumulative total revenue over six years, assuming certain milestones are met.
Marvell expects fiscal 2027 revenue to reach $12 billion, up from $8 billion in fiscal 2026. CEO Matthew Murphy said on the company’s Aug. 27, 2026, earnings call that the company’s revenue should pick up in the second half of this year, with its custom silicon business expected to more than double year over year in fiscal 2028, before accelerating “significantly” in fiscal 2029.
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Marvell CEO sees Google boosting custom revenue opportunity
Since June 2025, Murphy has guided to more than $10 billion of custom silicon revenue by fiscal 2029. On the recent earnings call, he added that the Google agreement “greatly increases the revenue opportunity for us in custom with some of that potentially starting in ’29.” The company plans to update its long-term revenue target at its upcoming Investor Day.
Marvell’s other products, including networking, controllers, and memory interfaces, should also see revenue growth as demand rises for Google’s TPUs and custom chips from other hyperscalers. Research from Cathie Wood’s team at Ark Invest expects spending on custom chips to grow faster than overall compute spending, which would be a tailwind for Marvell.
Selling the compute chip and the surrounding components can be lucrative and support strong earnings growth. While a more custom-chip mix could pressure margins, management expects its adjusted operating margin to increase. Marvell expects to exit the current year with an adjusted operating margin between 38% and 40%, reach the top end next year, and grow operating expenses more slowly than revenue.
Key risks, valuation, and the next catalyst
Marvell has to execute in a fast-moving AI compute market. It also depends heavily on Taiwan Semiconductor Manufacturing and other suppliers in Asia. Any disruption, including economic pressure, geopolitical risks, or natural disasters, could delay revenue targets. Of course, Marvell is also dependent on a booming data center market, and any regulation or other event that slows the data center build-out could derail its momentum.
The stock is priced for perfection at a forward price-to-earnings ratio of 60. Still, if Marvell delivers on its long-term revenue targets, shares could have meaningful upside. Analysts project earnings growth of roughly 46% annually over the next several years.
A near-term catalyst is Marvell’s upcoming Investor Day on Oct. 6, 2026. If management raises its long-term outlook for custom silicon revenue, the market may start valuing Marvell like a durable long-term growth story, potentially lifting the stock.
