Marvell’s AI Growth Outlook Rises, but Google Timing Weighs on Shares

Strong growth meets even higher expectations

Marvell Technology (MRVL) delivered record fiscal second-quarter revenue and raised its longer-term outlook, but the results were not enough to satisfy investors. Shares fell roughly 8% Friday after entering the report with gains of more than 180% for the year.

The disconnect centered on expectations. Revenue rose 37% year over year to $2.74 billion, while adjusted earnings reached $0.94 per share. Both narrowly exceeded consensus estimates. Marvell also guided fiscal third-quarter revenue to approximately $3.15 billion and raised its fiscal 2027 and fiscal 2028 revenue forecasts. But investors were looking for a larger near-term contribution from the company's expanding relationship with Alphabet (GOOGL) and its Google AI infrastructure programs.

Key Points

• Marvell reported record fiscal second-quarter revenue of $2.74 billion, up 37% year over year, with adjusted EPS of $0.94.
• The company raised its fiscal 2027 revenue outlook to about $12 billion and fiscal 2028 target to about $18 billion, supported by robust AI demand.
• Shares fell roughly 8% as investors focused on the timing of the Google opportunity, with a more meaningful contribution expected beginning in fiscal 2029.

Why Did Marvell Stock Fall Despite Strong Earnings?

Marvell's quarterly numbers were solid. Fiscal second-quarter revenue reached $2.74 billion, compared with consensus estimates around $2.71 billion to $2.72 billion. Adjusted earnings of $0.94 per share edged past expectations of $0.93.

The fiscal third-quarter outlook also came in above expectations. Marvell projected revenue of approximately $3.15 billion at the midpoint of its range, compared with an analyst estimate of roughly $3.04 billion. Adjusted EPS is expected to be $1.10 at the midpoint.

The problem was not an absence of growth. It was the size and timing of that growth relative to expectations.

Marvell stock had risen more than 180% in 2026 ahead of the earnings release and more than 40% since late July. That advance raised the hurdle for the quarterly report, particularly after Marvell expanded its relationship with Google.

Jefferies analysts described the lack of additional upside from the Google relationship in Marvell's current-year projections as "somewhat disappointing." Morgan Stanley similarly noted that the Google customer had already been incorporated into previous forecasts.

Marvell's stock reaction therefore highlighted a gap between strong reported growth and the even stronger expectations surrounding its AI business.

AI Data Center Demand Remains the Main Growth Engine

Marvell's Data Center business continued to dominate its results. Revenue from the segment reached a record $2.17 billion, rising 46% year over year and 18% sequentially. Data Center represented approximately 79% of total quarterly revenue.

Growth has been supported by multiple parts of Marvell's AI infrastructure portfolio, including optical interconnect products, switching technology and custom silicon. For the fiscal third quarter, the company expects Data Center revenue to rise 75% year over year and more than 20% sequentially.

CEO Matt Murphy said AI-related demand remains "exceptionally robust," and management expects revenue growth to accelerate further through the remainder of fiscal 2027.

That demand prompted Marvell to raise its broader forecasts. The company now expects fiscal 2027 revenue of approximately $12 billion, up from its previous $11.5 billion outlook. Its fiscal 2028 target increased to approximately $18 billion from $16.5 billion.

Marvell's Custom business is also expected to accelerate significantly during the second half of the current fiscal year. Citi analysts highlighted management's expectation for a "significant acceleration" in that business.

The growth comes with some pressure on profitability, however. Non-GAAP gross margin reached 58.9% in the second quarter but is expected to decline to between 57.5% and 58.5% in the third quarter. The increasing contribution from custom AI silicon is creating near-term pressure on the company's product mix.

Google Deal Pushes More of the Opportunity Into Fiscal 2029

The timing of Marvell's expanded Google relationship emerged as one of the central issues behind the earnings reaction.

Marvell works with Google on components of its AI tensor processing unit, or TPU, ecosystem. The expanded agreement covers custom AI processors as well as storage, networking, memory and near-memory computing hardware.

Google also received warrants that could allow it to acquire up to 7% of Marvell's shares, tied to revenue milestones. The potential stake has been valued at roughly $12.2 billion.

Murphy said the warrant structure reflects the scale and long-term potential of the relationship. But while some Google-related revenue is already incorporated into Marvell's forecasts through fiscal 2028, management indicated that the more meaningful contribution is expected in fiscal 2029 and beyond.

That distinction matters because investors had already reacted positively to the expanded Google relationship before the earnings report. The latest results showed that much of the near-term contribution was already incorporated into Marvell's existing outlook rather than representing additional upside to current forecasts.

Marvell plans to provide additional information at its Investor Day on October 6. Management is expected to discuss its longer-term custom silicon opportunity and AI infrastructure growth in greater detail.

What It Means for Investors

Marvell's post-earnings decline illustrates how a company can report rapid growth and raise its outlook while still disappointing the market.

The company's underlying AI businesses continued to expand rapidly. Data Center revenue grew 46%, third-quarter Data Center growth is projected at 75%, and Marvell increased both its fiscal 2027 and fiscal 2028 revenue forecasts.

At the same time, the stock entered the report after an extraordinary advance. That placed greater emphasis on whether results could exceed already elevated expectations rather than simply meet or modestly surpass Wall Street estimates.

The Google partnership adds another layer to that equation. Its potential scale is substantial, but management's comments indicate that a larger financial contribution sits beyond the company's current fiscal 2028 outlook.

Margins are another factor to watch as the business mix changes. Marvell expects gross margin to decline modestly in the third quarter as custom silicon becomes a larger contributor to revenue.

The October 6 Investor Day therefore takes on added importance as the market looks for more detail on custom silicon, Google-related programs and Marvell's longer-term AI infrastructure opportunity.

Conclusion

Marvell's fiscal second quarter showed little evidence of weakening AI demand. Revenue reached a record $2.74 billion, Data Center sales climbed 46%, and management raised its fiscal 2027 and fiscal 2028 revenue outlooks.

Friday's decline instead reflected the difference between strong fundamentals and the expectations embedded in Marvell's share price. Investors wanted a larger near-term benefit from the Google relationship after the stock's dramatic 2026 advance.

For now, Marvell's AI infrastructure growth remains strong, while the timing of its custom silicon expansion—and the larger Google contribution expected beginning in fiscal 2029—has become a key focus for the market.

FAQs

Why did Marvell stock fall after earnings?

Marvell stock fell roughly 8% despite beating quarterly estimates and raising longer-term forecasts. Investors were looking for greater near-term upside, particularly from the company's expanded relationship with Google, after Marvell shares had risen more than 180% in 2026 ahead of the report.

What did Marvell report for fiscal second-quarter earnings?

Marvell reported fiscal second-quarter revenue of $2.74 billion, up 37% year over year, and adjusted earnings of $0.94 per share. Both figures narrowly exceeded analyst expectations.

How fast is Marvell's Data Center business growing?

Marvell's Data Center revenue increased 46% year over year and 18% sequentially to a record $2.17 billion. The company expects fiscal third-quarter Data Center revenue to grow 75% year over year and more than 20% sequentially.

What is Marvell's new long-term revenue outlook?

Marvell raised its fiscal 2027 revenue outlook to approximately $12 billion from $11.5 billion and increased its fiscal 2028 revenue target to approximately $18 billion from $16.5 billion.

When is the Google partnership expected to have a larger impact on Marvell?

Some Google-related revenue is already included in Marvell's forecasts through fiscal 2028, but management indicated that a more meaningful contribution is expected to begin in fiscal 2029 and beyond.

This article was created with AI assistance and reviewed by an editor. For details, please refer to our Terms of Use.

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