Marvell Technology climbed 9.85% after agreeing to supply Alphabet with custom AI chips for Google's cloud and machine learning operations.
The deal includes a warrant allowing Google to purchase up to 58,970,907 Marvell shares at $206.58 per share, valued at roughly $12.2 billion.
Analysts view the partnership as a major positive, with one predicting Marvell shares could surge more than 50% to $360, reflecting strong confidence in Marvell's role in the AI data center expansion.
What happened
Marvell Technology agreed to supply Alphabet with custom AI chips for Google's cloud infrastructure and machine learning operations, including chips that accelerate AI inference, manage data flow, and speed up network information transfer. Google received a warrant to purchase up to 58,970,907 shares of Marvell at $206.58 per share, valued at roughly $12.2 billion.
Why it matters
The deal positions Marvell as a key supplier to one of the world's largest cloud and AI operators. RBC Capital Markets analyst Srini Pajjuri called it "a significant positive" for Marvell, and 38 of 43 analysts covering the stock rate it a buy or strong buy, reflecting confidence in Marvell's exposure to the AI data center boom.
What to watch
Pajjuri projects Marvell shares could surge more than 50% to $360 based on the Google deal and Marvell's position as a leading designer of high-performance data infrastructure chips.
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Marvell's deal with Google reflects the intensifying competition among cloud giants to secure specialized semiconductor supply chains for AI workloads. By partnering with a leading chip designer rather than developing everything in-house, Google gains flexibility and specialized expertise in data infrastructure chips—components that handle the complex task of moving data and accelerating machine learning inference at scale. The warrant structure, valued at roughly $12.2 billion, signals Google's confidence in Marvell's ability to execute and suggests a long-term commitment to the partnership.
For Marvell, the deal validates its strategic positioning as a supplier to hyperscalers (large cloud providers) during the AI data center expansion. Analyst enthusiasm reflects this reality: Wall Street sees Marvell as well-positioned to benefit from sustained demand for AI infrastructure chips. The 38-of-43 buy ratings and Pajjuri's $360 target price (a 50%+ upside from the day's trading levels) suggest the market views this partnership not as a one-off win but as proof that Marvell's high-performance data infrastructure offerings are critical to how the largest AI operators build their systems.
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