Marvell shares slide 8% as investor concerns over Google AI deal timing overshadow strong earnings beat
8 Sources
[1]
Marvell shares slide as concerns over timing of Google AI deal revenue eclipse strong results
Aug 28 (Reuters) - Marvell Technology's (MRVL.O), opens new tab shares fell 8% to $223.1 in premarket trading on Friday as concerns about the potential upside from its AI chip deal with Google overshadowed better-than-expected results from the semiconductor designer. The company secured a custom-chip deal with Alphabet's Google (GOOGL.O), opens new tab last week that could generate up to $120 billion in revenue through fiscal 2033 and make the search giant one of its largest shareholders. Investor focus on the timing of the deal's revenue contribution, however, eclipsed the company's higher revenue forecasts for fiscal years 2027 and 2028. "Expectations were higher, mostly because of the Google deal," analysts at Morgan Stanley said, adding that its contribution was already largely reflected in the company's prior guidance. CEO Matt Murphy said Marvell's custom revenue targets through fiscal year 2028 already reflected some Google-related revenue and that it would contribute much more significantly in fiscal year 2029. Shares of the company have nearly tripled in value this year. Marvell has emerged as a major winner from the AI infrastructure boom as Big Tech increasingly turns to custom chips for greater cost efficiency and performance. "While the quarter and near-term guides weren't overly exciting vs expectations, a combination of the GOOGL deal, prospects with Microsoft and AI connectivity upside could point to some big figures that make $20 in EPS power before the end of the decade look realistic," Melius Research analysts said in a note. At least five brokerages raised their price targets on Marvell following the results, with the median target of $275 implying a 13.8% upside from Thursday's close, according to LSEG data. The company expects revenue to grow about 45% in fiscal year 2027 to roughly $12 billion, up from its prior forecast of about $11.5 billion, thanks to more data-center revenue. It also forecast fiscal 2028 revenue of about $18 billion, up from its prior target of about $16.5 billion. Marvell trades at a premium compared to rival Broadcom (AVGO.O), opens new tab, with a 12-month forward price-to-earnings ratio of 58.41 versus 32.15, according to data compiled by LSEG. Reporting by Joel Jose in Bengaluru; Editing by Pooja Desai Our Standards: The Thomson Reuters Trust Principles., opens new tab
[2]
Marvell Leads AI Stocks Lower After Earnings That Narrowly Topped Estimates
Get personalized, AI-powered answers built on 27+ years of trusted expertise. A day after rallying on the back of strong results from Nvidia, the AI trade is stumbling to close out the week. Marvell Technology (MRVL) shares were down nearly 6% in recent trading, leading several AI-related stocks lower. Shares of Nvidia (NVDA), Intel (INTC), Advanced Micro Devices (AMD), Micron (MU), and Sandisk (SNDK) slipped less than 1%, on a day when broader markets gained. Last night, Marvell posted revenue of $2.74 billion and adjusted earnings of 94 cents per share, each narrowly topping the Visible Alpha analyst consensus of $2.71 billion and 93 cents per share. The midpoint of Marvell's third-quarter revenue and adjusted EPS forecasts also slightly beat estimates at $3.15 billion and $1.10, respectively. Investors may have been hoping for a bigger beat, amid a rush of spending from big tech companies on AI hardware, along with a custom chip deal with Google parent Alphabet (GOOGL). Jefferies analysts called it "somewhat disappointing" that there wasn't more upside from the deal with Google in Marvell's projections for this year. Marvell CEO Matt Murphy said the chip designer's AI demand remains "exceptionally robust," leading the company to lift its revenue forecasts for this year and its next fiscal year. Citi analysts highlighted comments from Marvell executives that the company expects a "significant acceleration" in its custom chip business in the back half of this fiscal year. Even with Friday's decline, Marvell is still one of the best performing stocks in the S&P 500 this year, with shares up over 160% in 2026.
[3]
Marvell's Google AI Chip Deal Could Drive $120 Billion in Long-Term Revenue: Analyst - Marvell Technology
Marvell Technology Group Ltd. (NASDAQ:MRVL) stock drew fresh analyst commentary on Friday after the company raised its fiscal 2027 and fiscal 2028 revenue outlook. Rosenblatt analysts reiterated a Buy rating and $300 price forecast, based on 28 times their fiscal 2029 earnings-per-share framework. Needham raised its price forecast to $300 from $270, maintaining a Buy rating, based on approximately 30 times their calendar 2028 non-GAAP EPS estimate of $10.25. Marvell's stock is falling on Friday despite record results because investors were expecting even more after its huge 220%+ rally over the past year. The main concern is that rapid growth in lower-margin custom AI chips is temporarily pressuring gross margins, while major new AI deals such as Google's are expected to contribute more meaningfully only in later years. In short, the AI business is getting stronger, but investors are now demanding faster profitable growth and believe much of the good news is already priced into the stock. Revenue Outlook Raised Management raised its fiscal year 2027 and fiscal year 2028 revenue outlook by $500 million and $1.5 billion, to approximately $12 billion and $18 billion, respectively. Needham noted management guided fiscal year 2028 revenue growth to more than 50% year-over-year, up from a prior outlook of 45%. Data Center Segment Drives Growth Rosenblatt attributed the increase to scale-out interconnect, switching and a custom silicon ramp in the second half of fiscal year 2027. Markets EXCLUSIVE: Claude Revenue Surges 1,000% as Anthropic Gains on ChatGPT Claude now earns 31 cents for every $1 ChatGPT makes on mobile, up from just 3 cents in January, as Anthropic rapidly closes the revenue gap. 3 min read Read this article Needham said data center revenue is now expected to grow more than 60% year-over-year in fiscal year 2028. Google Agreement Details Needham noted that if all milestones under Marvell's previously announced commercial agreement with Google are achieved, it could represent up to $120 billion of revenue over the next six years. Analyst Day Set for October Rosenblatt pointed to Marvell's Analyst Day in early October, when management is expected to provide additional detail on long-term revenue and margin targets. Trending MRVL Price Action: Marvell Technology shares were down 9.96% to $217.41 at the time of publication on Friday, according to Benzinga Pro data. Markets Nvidia Warns Of AI Power Bottleneck -- And Bloom Energy Could Benefit Nvidia says AI power constraints can take years to solve. Evercore sees Bloom Energy benefiting as data-center demand keeps climbing. 3 min read Read this article Photo by JHVEPhoto via Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.
[4]
Marvell CEO Calls Google AI Deal a 'Monster Number' - Marvell Technology (NASDAQ:MRVL)
Investors are asking the wrong question about the company's landmark Google agreement, according to Marvell Technology Inc. (NASDAQ:MRVL) CEO Matt Murphy. Analysts spent much of Thursday's earnings call trying to quantify how much revenue Google's newly disclosed commercial agreement could generate. Murphy's answer wasn't a number. Instead, it was a signal: Wall Street's existing models may already be too low. "If you took the full performance and the full opportunity, then you're right. It's just a monster number." The remark captured what may have been the call's biggest takeaway -- not that Alphabet Inc's (NASDAQ:GOOGL) (NASDAQ:GOOG) Google represents another large AI customer, but that Marvell believes the agreement materially expands the company's long-term earnings power. Marvell Says Google's AI Opportunity Extends Well Beyond Current Forecasts The discussion began after analysts noted that Google's agreement, which carries the potential for up to $120 billion in cumulative revenue over six-and-a-half years if performance milestones are achieved, implies roughly $18 billion in annual revenue at peak. Media Marvell Technology Stock Slides: Data Center Strength Overshadowed by Valuation Concerns Marvell Technology stock fell nearly 8% premarket as clarification around its Google deal and rich valuations outweighed a strong Q2 earnings beat and raised outlook. 2 min read Read this article Murphy didn't challenge the arithmetic. "When you look at the scale of this, your math is not wrong." Instead, he cautioned that the timing matters. Management said much of the revenue expected next year is already reflected in guidance, as several programs are underway. The larger acceleration, Murphy said, comes later. Trending "The big impact would be in '29 and beyond." That distinction matters because it shifts the conversation away from next year's earnings and toward Marvell's longer-term AI revenue trajectory. Marvell's Google Deal Is Bigger Than One AI Chip Program Murphy also pushed back on the idea that investors should view the agreement as a single custom silicon win. According to management, the Google relationship spans inference accelerators, networking interface cards (NICs), storage controllers, memory interface controllers, near-memory compute and the company's XPU attach portfolio. "It's a number of products and product lines," Murphy said, describing the engagement as "very broad-based." That breadth helps explain why Murphy repeatedly suggested analysts may still be underestimating the opportunity. "Beyond whatever you've modeled previously... custom numbers definitely go higher." He went even further, saying Marvell's custom AI business would become "a lot larger than anybody's been modeling so far." While Murphy declined to provide updated long-term revenue targets ahead of Marvell's Investor Day, he indicated the company plans to present a more detailed roadmap extending through the end of the decade. What Investors Should Watch Next The immediate story isn't whether Google's agreement eventually reaches its maximum revenue potential -- management deliberately avoided making that prediction. The more important signal is that Marvell is framing the deal as evidence that its position in AI infrastructure has expanded beyond what current consensus models reflect. Investors will now be looking to the company's upcoming Investor Day, where management has promised to quantify that opportunity and explain how Google's agreement fits into Marvell's broader AI growth strategy. Tech Bill Gates AI Warning Meets Nvidia's AI Financing Push Bill Gates wants AI to slow down. Nvidia's latest earnings reveal how it's financing AI infrastructure to keep the boom accelerating. 4 min read Read this article Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.
[5]
Marvell Technology earnings analysis: questions answered and next catalysts By Investing.com
Investing.com -- Marvell Technology beat Q2 FY2027 estimates -- $0.94 EPS vs $0.93 expected, $2.74B revenue vs $2.71B consensus -- yet the stock fell 8.2% to $221.63. The market's verdict: in a stock up 187% over the past year, beating by a penny isn't enough. Guidance of $3.15B for Q3 topped consensus, but the bar has been set high. What the Earnings Call Answered The Q2 FY2027 report, delivered on August 27, 2026, resolved several critical investor questions: Is the data center thesis intact? Yes. Data center revenue hit $1.83B -- now 76% of total revenue -- with 27% YoY growth. AI and cloud computing drive over 90% of this segment. The transition from legacy end-markets to AI infrastructure is no longer a bet; it's a fact. What about the Google deal? Formalized just days before earnings, the commercial agreement covers approximately $120B in custom AI product business through 2033 -- spanning storage controllers, NICs, and AI inference accelerators. Management confirmed custom silicon will more than double to ~$4B in FY2028, with a $10B FY2029 target reaffirmed. Read more Can margins sustain this growth? Non-GAAP gross margin held at 58.9%, with operating margin at 35%. Record operating cash flow of $639M demonstrates the fabless model's leverage at scale. What's the optical interconnect roadmap? Marvell is shipping 800G PAM4 DSPs and ramping 200G-per-lane 1.6T solutions in H2 FY2026. DCI (data center interconnect) is targeting $1B annualized revenue by FY2028. The Polariton acquisition adds silicon photonics with modulators exceeding 1 terahertz bandwidth. Supply chain risks? Management is making ~$1B in prepayments starting Q2 to lock in capacity -- a signal that demand visibility is strong enough to front-load cash commitments. Read full summary & transcript Revenue Trajectory Accelerating The consensus trajectory is: $8.19B (FY2026) → $11.58B (FY2027) → $16.91B (FY2028) → $24.21B (FY2029). That's a ~30% CAGR through FY2029 -- and EPS estimates grow even faster, from $2.84 to $9.59 over the same window, reflecting operating leverage. The Sell-Off Paradox Despite six consecutive quarters of EPS beats, the stock dropped. Why? Benchmark's Cody Acree noted that the guidance increase was "insufficient given the stock's recent performance," especially after NVIDIA's earnings the day before set an even higher bar for the AI supply chain. Read moreCantor Fitzgerald maintained Neutral at a $300 target, noting the stock trades at 29x CY2028 earnings -- expensive, but they see risk/reward tilting up after this pullback. Read more Next Catalysts on the Horizon 1. Q3 FY2027 Earnings (November 26, 2026) -- Consensus: $1.07 EPS on $3.03B revenue. The key question: does the $3.15B guide hold, or does Marvell raise again? 2. 1.6T Optical Ramp -- The transition from 800G to 1.6T is the next product cycle inflection. Any acceleration data from hyperscaler deployments will move the stock. 3. Celestial AI & Polariton Integration -- Two acquisitions aimed at photonic fabric and silicon photonics. Revenue contribution updates and technology milestones will signal whether Marvell is building a durable moat or just accumulating IP. 4. Analyst Day -- Cantor Fitzgerald flagged an upcoming analyst event as a potential catalyst. Management's long-term TAM expansion narrative (data center TAM now $94B by 2028, targeting 20% share) needs quantified proof points. Read more 5. NVIDIA Collaboration Outcomes -- The extended partnership on silicon photonics and networking semiconductors could yield product announcements that validate Marvell's position in the NVIDIA ecosystem. 6. Custom Silicon Pipeline Conversion -- Over 50 new opportunities with $75B lifetime revenue potential. Any new hyperscaler wins beyond Google would de-risk the growth story. Bull vs. Bear at $221 This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
[6]
Earnings call transcript: Marvell beats Q2 2026 estimates but shares fall By Investing.com
Marvell Technology beat Wall Street's expectations for its fiscal second quarter, reporting non-GAAP earnings of $0.94 a share on revenue of $2.74 billion, both slightly ahead of estimates. But the stock fell sharply after hours, dropping 7.09% to $224.34, as investors weighed the company's strong AI-driven growth against a rich valuation and a near-term margin mix that looked less favorable than the headline numbers. Key Takeaways * Marvell posted record fiscal second-quarter revenue of $2.739 billion, up 13% from the prior quarter and 37% from a year earlier. * Non-GAAP EPS of $0.94 beat the forecast by $0.01, while revenue topped expectations by about $30 million. * Data center revenue reached $2.17 billion, or 79% of total sales, and grew 46% year over year. * The company raised its full-year fiscal 2027 revenue outlook to about $12 billion and lifted its fiscal 2028 revenue target to about $18 billion. * Shares fell after hours despite the beat, suggesting investors were focused on guidance, margins and expectations that had already been high. The stock's valuation had climbed to stretched levels heading into the report, with shares trading at a P/E ratio of 84.29. Yet the company's PEG ratio of just 0.14 suggests the premium may be justified by near-term growth prospects. According to InvestingPro analysis, Marvell currently appears overvalued relative to its Fair Value estimate, placing it among companies on the Most Overvalued list. Company Performance Marvell said demand across its data-center business continued to accelerate, driven by AI infrastructure spending, optical networking and custom silicon. Revenue growth was broad, but the data-center segment remained the main engine, with sales of $2.17 billion. That business alone was larger than many chipmakers' total quarterly revenue. The company's non-GAAP operating margin expanded to 36.6%, up 180 basis points from a year earlier and 160 basis points from the prior quarter. That showed Marvell is still gaining operating leverage even as it invests heavily in capacity and new products. Management said the strength was not limited to one product line. Optical DSPs, scale-out switching, broadband analog, CXL memory expansion and custom silicon all contributed to the quarter and to the stronger outlook. Communications and other end markets brought in $568 million, down 3% sequentially but up 10% year over year. Financial Highlights * Revenue: $2.739 billion, up 13% sequentially and 37% year over year. * Non-GAAP EPS: $0.94, up 40% year over year. * GAAP EPS: $0.33. * Non-GAAP gross margin: 58.9%. * GAAP gross margin: 53.1%. * Non-GAAP operating margin: 36.6%, up 180 basis points year over year. * Operating cash flow: $606 million. * Share repurchases: $200 million. * Cash dividends: $54 million. * Data-center revenue: $2.17 billion, up 18% sequentially and 46% year over year. Over the last twelve months, Marvell posted revenue growth of 34%, reflecting the sustained momentum in AI infrastructure spending. InvestingPro Tips highlight that the stock trades with high price volatility -- reflected in its beta of 2.25 -- but has delivered a remarkable 224% return over the past year. Investors can access 18 additional ProTips on the platform for deeper insights into Marvell's investment profile. Earnings vs. Forecast Marvell beat expectations on both profit and sales, but only by a narrow margin. * EPS actual: $0.94 * EPS forecast: $0.93 * EPS surprise: $0.01, or about 1.1% * Revenue actual: $2.74 billion * Revenue forecast: $2.71 billion * Revenue surprise: $30 million, or about 1.1% The quarter was therefore a modest beat rather than a blowout. That matters because Marvell's shares had already risen sharply over the past year, and investors often demand a larger upside surprise from a company tied to AI spending. The more important signal came from guidance. Management raised its fiscal 2027 revenue outlook and increased its fiscal 2028 target, which suggests the company sees demand staying strong well beyond the current quarter. Even so, the market's immediate reaction showed that investors may have been looking for an even bigger near-term upside. Market Reaction Marvell shares closed the regular session at $241.42, down 1.51% from the previous close of $245.11. After the report, the stock fell to $224.34 in after-hours trading, a decline of $17.11, or 7.09%, from the regular-session close. From the prior close to the after-hours level, the stock was down $20.77, or about 8.47%. The move pushed the shares farther away from the 52-week high of $329.88, though they remained far above the 52-week low of $61.44. The decline suggests investors may have been taking profits after a strong run and focusing on the quality of the near-term mix. Marvell said custom silicon ramps would weigh on gross margin in the third quarter, even as revenue growth stays strong. In a market that has rewarded AI infrastructure names aggressively, that kind of margin pressure can trigger a sharp response. With a market capitalization of $211.64 billion, Marvell ranks as a prominent player in the semiconductor industry. InvestingPro assigns the company a "GREAT" Financial Health Score of 3.07 out of 5, supported by a strong current ratio of 3.28 and return on equity of 16%. For investors seeking comprehensive analysis, Marvell is among the 1,400+ US stocks covered by Pro Research Reports, which distill complex data into clear, actionable intelligence. Outlook & Guidance For the third quarter of fiscal 2027, Marvell guided for revenue of $3.15 billion at the midpoint, which would be up 15% sequentially and more than 50% year over year. The company expects non-GAAP EPS of $1.05 to $1.15. Management also guided for: * Non-GAAP gross margin of 57.5% to 58.5% * GAAP gross margin of 52.9% to 53.9% * Non-GAAP operating expenses of about $655 million * A non-GAAP tax rate of 11% For the full fiscal year 2027, Marvell now expects revenue of about $12 billion, up from a prior outlook of about $11.5 billion. It also raised its fiscal 2028 revenue outlook to about $18 billion, from $16.5 billion previously. The company said data-center revenue should grow about 60% in fiscal 2027 and more than 60% in fiscal 2028. It also expects non-GAAP operating expenses to grow at roughly half the rate of revenue growth in fiscal 2028, which should help margins expand further. Management said operating margin is expected to enter the company's long-term target range of 38% to 40% in the fourth quarter of fiscal 2027 and move toward the high end of that range in fiscal 2028. Executive Commentary Chief Executive Matt Murphy said, "The strength of our data center business continues to exceed our prior expectations." The comment captured the central theme of the call: Marvell is seeing faster demand than it had planned for, especially in AI infrastructure. Murphy also said, "Marvell is uniquely positioned to help customers move towards the optical scale-up architecture that best meets their needs." That reflects the company's push into next-generation networking, where customers are moving from copper to optical links and need both switching and interconnect products. Chief Financial Officer Dan Durn said, "We expect revenue to continue growing substantially faster than operating expenses." He added that non-GAAP operating margin should enter the company's 38% to 40% target range in the fourth quarter, underscoring the company's effort to scale profitably. Risks and Challenges * Capacity constraints: Marvell said it is making about $1 billion in capacity prepayments this fiscal year to secure supply, which shows demand is strong but also highlights supply risk. * Margin pressure from mix: The company said custom silicon ramps can weigh on gross margin in the near term. * Execution risk: The growth story depends on multiple product ramps, including 1.6T optics, scale-up switching and custom programs. * Customer concentration: A large share of the opportunity is tied to hyperscalers and a few major AI customers. * High expectations: After a strong stock run, even good results may not be enough to satisfy investors. Q&A Analysts focused heavily on the size and timing of Marvell's custom silicon opportunity, especially the commercial agreement with Google. Murphy said the agreement covers multiple product lines, including inference accelerators, storage controllers, NICs, memory interface controllers and near-memory compute. He said much of the revenue is already included in next year's guidance, but that the bigger impact comes in fiscal 2029 and beyond. Questions also centered on scale-up optics, where Murphy said the opportunity is larger than previously thought and is helping drive the $1.5 billion increase in fiscal 2028 revenue guidance. He said the market is not moving in a simple one-step shift from copper to optics, but in parallel paths that require multiple solutions. Another focus was CXL and memory expansion. Murphy said the technology has become "a home run" as customers use it for memory scarcity and inferencing workloads. Analysts also asked about the margin outlook, and Durn said gross margins should stay in a similar range in the back half of fiscal 2027 and into fiscal 2028, while operating leverage continues to build. Full transcript - Marvell Technology Inc (MRVL) Q2 2027: Operator: Good afternoon, and welcome to Marvell Technology Incorporated second quarter of fiscal year 2027 earnings conference call. At this time, all participants are in a listen-only mode. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. Please note this event is being recorded. I will now turn the conference over to Mr. Ross Seymour, Senior Vice President of Investor Relations. Thank you. You may begin. Ross Seymour, Senior Vice President of Investor Relations, Marvell Technology: Thank you, and good afternoon, everyone. Welcome to Marvell's second fiscal quarter 2027 earnings call. Joining me today are Matt Murphy, Marvell's Chairman and CEO, Dan Durn, CFO, Chris Koopmans, President and COO, and Sandeep Bharathi, President of our Data Center Group. Let me remind everyone that certain comments made today include forward-looking statements, which are subject to significant risks and uncertainties that could cause our actual results to differ materially from management's current expectations. Please review the cautionary statements and risk factors contained in our earnings press release, which we filed with the SEC today and posted on our website, as well as our most recent 8-K, 10-K, 10-Q, and other documents that we file from time to time with the SEC. We do not intend to update our forward-looking statements. During our call today, we will refer to certain non-GAAP financial measures. A reconciliation between our GAAP and non-GAAP financial measures is available in our earnings press release. Let me now turn the call over to Matt for his comments on the quarter. Matt? Matt Murphy, Chairman and CEO, Marvell Technology: Thanks, Ross, and good afternoon, everyone. Before I discuss our results and outlook, I want to briefly highlight two management transitions that occurred during our last quarter. First, Willem Meintjes stepped down as Marvell's CFO in mid-June. I deeply appreciate Willem's steady hand, leadership, and tireless commitment to transforming Marvell over his decade with the company, and I greatly respect his desire to spend more time with his family. To ensure a seamless transition, we simultaneously welcome Dan Durn as our new CFO. Dan brings more than three decades of experience in senior finance roles across semiconductor and enterprise technology companies. Having most recently served on Marvell's board of directors, Dan comes into the role with a deep understanding of our business and strategy, as well as a unique appreciation for the significant growth opportunities at Marvell ahead. Second, in July, we began a transition in our investor relations leadership. After eight years with Marvell, Ashish Saran will retire from the company in April 2027. I want to personally thank Ashish for his leadership, partnership, and countless contributions to Marvell. I also appreciate the thoughtfulness and care he has brought to planning this transition, including helping us identify the right successor. On that front, I am very pleased to welcome Ross Seymour, who comes to us from Deutsche Bank, where he covered the semiconductor industry for more than 25 years. Warm welcome to you, Dan and Ross. Now let me move on to our results and outlook. For the second quarter of fiscal 2027, Marvell delivered record revenue of $2.739 billion, reflecting 13% sequential and 37% year-over-year growth. Revenue and non-GAAP earnings per share of $0.94 both exceeded the midpoint of guidance. On our last earnings call, we increased our sequential revenue growth expectation for the third and fourth quarters of this fiscal year to double-digit percentage growth, up from our prior outlook of high single-digit growth. Since then, our outlook has continued to strengthen, and we now expect revenue growth to further accelerate in the second half. The strength is reflected in our guidance for the third quarter of fiscal 2027, where we expect total company revenue of $3.15 billion at the midpoint, representing growth of 15% sequentially and more than 50% year over year. We expect growth to further accelerate in the fourth quarter, both sequentially and year over year. As a result, we now expect overall Marvell revenue in fiscal 2027 to grow approximately 45% year over year to roughly $12 billion, up from our prior outlook of approximately $11.5 billion just one quarter ago. The increase in our revenue outlook continues to be driven by our data center business, which we now expect to grow by approximately 60% this fiscal year, up from our prior expectation of approximately 50%. Importantly, this growth remains broad-based. Interconnect continues to lead the way, while our custom business is expected to ramp significantly in the second half. For our communications and other end markets, the trajectory remains largely as expected. Despite typical quarter-to-quarter lumpiness in these businesses, we currently expect fiscal 2027 growth to approach our 10% target. Looking ahead to fiscal 2028, aggregate demand continues to accelerate, and our operations team is doing an outstanding job securing additional supply despite pervasive industry-wide constraints. As a result, we now expect Marvell's data center revenue to grow more than 60% year over year in fiscal 2028, driven by strong growth across all of our key data center businesses. This includes custom more than doubling, as we indicated last quarter. We look forward to providing a deeper dive into the specific drivers of our longer-term growth at our Investor Day in New York City on October 6, but the key takeaway for today is clear. The strength of our data center business continues to exceed our prior expectations. Putting it all together, we now expect fiscal 2028 revenue of approximately $18 billion, up $1.5 billion from the $16.5 billion outlook we provided just one quarter ago. Importantly, even as our revenue base becomes significantly larger, our growth rate is accelerating. We now expect fiscal 2028 revenue to grow approximately 50% year over year, compared with approximately 45% in our prior outlook. With that, let me provide color on our current business, beginning with data center. In our data center end market, we delivered record second quarter revenue of $2.17 billion, representing 18% sequential growth and 46% year-over-year growth. Both sequential and year-over-year growth accelerated from the first fiscal quarter, when data center revenue increased 11% sequentially and 27% year-over-year. Looking ahead to the third fiscal quarter, we expect this acceleration to continue, with data center revenue forecasted to grow more than 20% sequentially and roughly 75% year-over-year. The drivers of this growth remain very broad-based as AI demand for our products continues to rise. We are seeing strong tailwinds across each of our data center businesses, including interconnect, switching and custom. Connectivity continues to be a critical enabler of AI performance, driven by robust demand for both our interconnect and switching products. Thus far, the largest driver of growth for these businesses has been for scale-out applications. Here, Marvell's market-leading franchises in optical DSPs, switching, and broadband analog components continue to see significant demand. On the optical DSP side, 800G demand remains strong, while our 1.6T business is ramping rapidly, a trend we expect to accelerate further in FY 2028. Within scale-out switching, our business remains on track to more than double this year, driven by a strong ramp in our 51.2T products across a broadening array of customers. Within broadband analog, demand for our industry-leading TIAs and drivers continues to exceed expectations. Moving beyond scale-out, we expect this connectivity strength to broaden as hyperscalers build significantly larger AI clusters that increasingly span multiple data centers. As we have discussed on prior calls, aggregate bandwidth requirements for these scale-across networks are projected to be more than 10 times greater than those of current front-end DCI networks. Marvell is ideally positioned to address this opportunity through our leadership in coherent DSP-enabled 1.6T ZR and ZR+ DCI modules. Finally, we continue to expect the adoption of scale-up networking and AI infrastructure to create a massive new TAM for Marvell. Scale-up domains are expected to become significantly larger, requiring high bandwidth interconnects closely coupled with high radix, low latency switches. While customers are initially deploying copper interconnect for scale-up networking, as cluster sizes grow, the reach and bandwidth limitations of copper are increasingly driving customers towards optical interconnects, as well as purpose-built UALink, ESUN and NVLink scale-up switches. As a result, we are investing aggressively to lead the industry in next generation scale-up optical interconnect and switching technologies. On the interconnect side, pluggable modules remain the primary form factor for scale-out networks, and we do not expect that to change. However, the significantly higher bandwidth density required by scale-up networks is best served by bringing optics much closer to XPUs and switches. While the transition in scale-up networks from copper to optics is expected to take several years, with both technologies coexisting, customers are aggressively planning scale-up optics deployments starting as early as next year. Given how early we are in this transition, customers are evaluating a broad range of potential solutions with multiple technologies under consideration, including NPO and CPO packaging options, with both leveraging advanced silicon photonics as well as three different modulator technologies: MZM, EAM and MRM. Each of these choices has different considerations around cost, power and technology maturity. Importantly, given the breadth of our optical portfolio across modulation technologies, fully supported by our broadband analog TIAs and drivers, Marvell is uniquely positioned to help customers move towards the optical scale-up architecture that best meets their needs. The full spectrum of Marvell-developed solutions is reflected in accelerating design activity with a broad set of customers. In addition to our ongoing success in CPO, we are also seeing a strong adoption of our NPO solutions at multiple customers. As a result, our fiscal 2028 revenue outlook for scale-up optics has increased meaningfully compared to prior expectations, positioning Marvell to be one of the largest enabler of NPO in AI infrastructure. Moving to scale-up switching, we are seeing similar momentum. Marvell is uniquely positioned to support all three purpose-built scale-up protocols through our internally developed UAL and ESUN switches, as well as our expanded partnership with Nvidia around NVLink Fusion. Our scale-up switches leverage decades of experience developing large radical-sized switch silicon, combined with our in-house best-in-class high performance SerDes technology. The close coupling of optics and switching in scale-up networks provides another important differentiator for Marvell, given our market leading positions in both technologies. This allows us to deliver highly optimized scale-up solutions designed to provide customers with exceptional performance and reliability while accelerating time to market. As a result, we are engaged in multiple deep discussions with tier 1 customers across our scale-up switch portfolio, with each engagement representing a multi-billion dollar lifetime revenue opportunity given the expected size of the scale-up TAM. Taken together, we are extremely excited about the continued acceleration and broadening of networking demand as AI architectures require ever-increasing performance across scale-out, scale-across and scale-up domains. Okay, now let's turn to the custom business within our data center end market. As I mentioned earlier, we are seeing a significant acceleration in custom demand in the second half of this year. We remain confident that this business will more than double year-over-year in fiscal 2028 and accelerate significantly in fiscal 2029. We expect this growth to be driven by both our XPU and XPU-attached products. In XPUs, we continue to make strong progress across current and next generation programs at multiple hyperscalers. In XPU attach, we are benefiting from increasing demand for both CXL and custom next. Looking further ahead, we expect our custom business to continue to deliver strong revenue growth as we see ongoing robust design activity with hyperscale customers. The most recent example of this momentum is the 8-K we filed last week, disclosing an expanded commercial agreement and associated warrant with a key hyperscaler, one of the largest adopters of custom silicon. The warrant agreement encompasses custom programs already in execution that were awarded to Marvell over the past several years, new design wins, and future potential programs. The warrant structure reflects the scale and long-term potential of the relationship and further aligns common interests as our work together expands. It spans a broad range of custom silicon programs, including those that attach to the TPU ecosystem, such as AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near memory compute. We look forward to continue working closely with this customer to enable the next generation of AI infrastructure. This expanding range of attached products and the scale of this agreement provides significant validation of the XPU attached category that Marvell has pioneered. We are excited to see both the use cases and attach rates for this category of products continue to broaden. These products are built upon a rich portfolio of Marvell IP and perform specialized functions designed to significantly improve the performance and efficiency of the overall AI data center. This is another strong confirmation of Marvell's leadership in connectivity, compute, and memory technologies, and the increasingly important role they play in enabling our customers to design more advanced AI infrastructure. In terms of the impact of the new warrant agreement, revenue from programs covered by the agreement through fiscal 2028 is already reflected in the overall custom revenue target we have previously provided. Looking at fiscal 2029 and beyond, this agreement, along with several additional programs, gives us even greater confidence in our ability to grow the custom business to a significantly larger scale in that timeframe. We look forward to sharing more details on the long-term trajectory of our custom business at our upcoming Investor Day. Turning to our communications and other end market, we delivered second quarter revenue of $568 million, down 3% sequentially and up 10% year over year. Going forward, we expect revenue to remain somewhat lumpy on a quarterly basis given the mix of businesses in this segment. For the third fiscal quarter, we expect revenue to decline in the low to mid-teens percentage range, both sequentially and year over year, followed by a solid sequential recovery in the fourth quarter. To summarize, the momentum across our business remains exceedingly strong. In the near term, that strength is reflected in the significant increases to our outlook. Compared with the expectations we provided just one quarter ago, we have increased our fiscal 2027 revenue outlook by approximately $500 million and our fiscal 2028 outlook by approximately $1.5 billion. The center of this higher outlook is our data center business, where growth continues to both accelerate and broaden. We've increased our forecast for data center revenue growth in fiscal 2027 from our prior expectation of 50% to approximately 60%, and we see potential for further acceleration in fiscal 2028. Within connectivity, we continue to see strength established in areas such as optical DSPs, while also seeing significant growth across broadband analog TIAs and drivers, scale across DCI modules, and scale-out switching. Each of these three businesses is on or ahead of the trajectory toward the billion-dollar annualized revenue run rate we highlighted last quarter. Scale-up opportunity remains massive and is still largely ahead of us. Marvell is ideally positioned for the transition toward NPO and CPO optical interconnects, as well as the adoption of purpose-built scale-up switches. Our custom business, including both XPU and XPU attached, is also on a strong growth trajectory, both near term and longer term. The 8-K we filed last week highlights the expanded scope of our relationship with a key hyperscaler and reinforces our confidence in the increasingly important role custom silicon will play in the ongoing AI infrastructure build-out. We look forward to sharing more about the longer-term growth opportunities we see for Marvell at our Investor Day on October 6 in New York City, and we hope to see many of you there. Now with that, I'll turn the call over to Dan for more details on our recent results and outlook. Dan Durn, Chief Financial Officer, Marvell Technology: Thank you, Matt. Good afternoon, everyone. Before I get into the financials, since this is my first earnings call as Marvell's CFO, I want to spend a moment on three things. Why I joined Marvell, what I hope to accomplish as CFO, and what I believe that should ultimately mean for our stockholders. First, I joined Marvell because I believe the company has incredible growth potential. I believe Marvell is at a unique inflection point with a broad and diverse set of capabilities that have been intentionally built and are ideally aligned to enable the future of AI infrastructure. Second, my goal as CFO is to help Marvell scale efficiently and effectively to capture what I expect to be a tremendous opportunity. The company has a strong history of disciplined execution, and maintaining that rigor will remain paramount as we strategically allocate capital to fuel our growth. Third, I expect that growth to translate into significant value creation for our stockholders. I recognize that the growth opportunity ahead must be matched by its quality, and I plan to remain intensely focused on expanding operating margins, growing cash flow, and driving attractive stockholder returns. With that, let me turn to our financial results for the second quarter of fiscal 2027. Revenue was $2.739 billion, growing 37% year-over-year and 13% sequentially. Data center was our largest end market, contributing 79% of total revenue and growing 46% year-over-year. GAAP gross margin was 53.1%. Non-GAAP gross margin was 58.9%, slightly above the midpoint of our guidance. Moving to operating expenses. GAAP operating expenses were $996 million, including stock-based comp, amortization of acquired intangible assets, restructuring costs, and acquisition related costs. Non-GAAP operating expenses were $611 million, slightly above our guidance. GAAP operating margin was 16.8%, while non-GAAP operating margin was 36.6%. Non-GAAP operating margin expanded 180 basis points year-over-year and 160 basis points sequentially, demonstrating the significant operating leverage in our model. For the second quarter, GAAP earnings per diluted share were $0.33. Non-GAAP earnings per diluted share were $0.94, a penny above the midpoint of our guidance, and up 40% year-over-year. Now turning to cash flow in the balance sheet. Cash flow from operations was $606 million in the second quarter, down slightly quarter-over-quarter, primarily reflecting the higher capacity prepayments to suppliers in support of Marvell's future growth. Inventory at the end of the second quarter was $1.36 billion, down just slightly from the prior quarter. During the quarter, we repurchased $200 million of our common stock through our ongoing capital return program and returned $54 million to stockholders through cash dividends. At the end of the second quarter, total debt was $4.96 billion, with gross debt to EBITDA ratio of 1.32 times and net debt to EBITDA ratio of 0.27 times. Turning to our guidance for the third quarter of fiscal 2027. We are forecasting revenue of $3.15 billion, plus or minus 5%. We expect GAAP gross margin to be between 52.9% and 53.9%. We expect our non-GAAP gross margin to be between 57.5% and 58.5%. Revenue levels and product mix remain key determinants of gross margin in any given quarter, with the forecasted acceleration of our custom business creating the sequential headwind in the fiscal third quarter. We currently expect to maintain gross margin in this range in the fourth fiscal quarter. We project GAAP operating expense of approximately $1.015 billion in fiscal Q3 and non-GAAP operating expenses of approximately $655 million. We expect GAAP other income and expense, including interest on our debt, to be an expense of approximately $86 million. On a non-GAAP basis, we expect other income and expense, including interest on our debt, to be an expense of approximately $36 million. We expect a non-GAAP tax rate of 11%. Looking ahead, given the significant increase in our revenue and earnings outlook, we expect non-GAAP tax rate of approximately 13% in fiscal 2028. We expect basic weighted average shares outstanding of approximately 900 million and diluted weighted average shares outstanding of approximately 921 million, both roughly flat with the second quarter. We anticipate GAAP earnings per diluted share of $0.48 to $0.58. We expect non-GAAP earnings per diluted share of $1.05 to $1.15. As we look ahead, we intend to continue investing in our business to drive substantial revenue growth in the years ahead while delivering operating leverage. For fiscal 2027, we expect non-GAAP operating expenses of approximately $2.55 billion, slightly above our prior expectation of $2.45 billion, reflecting the significantly larger revenue opportunity we now see. Importantly, we expect revenue to continue growing substantially faster than operating expenses. As a result, we expect significant operating leverage, with non-GAAP operating margin likely to enter our 38%-40% long-term target range in Q4 of this fiscal year. Looking ahead to fiscal 2028, we currently expect non-GAAP operating expenses to grow at roughly half the rate of revenue growth in percentage terms. This reflects continued investment against an expanding opportunity set, while yielding continued operating leverage to achieve the upper end of our target non-GAAP operating margin of 38%-40% as we progress through the year. Moving to cash usage. Based on the design wins we've secured and our confidence in the sustained customer demand, we're aggressively securing additional capacity to support our growth. We remain on pace to make approximately $1 billion of capacity prepayments to suppliers in fiscal 2027, consistent with the guidance we provided last quarter. As a reminder, these prepayments will be applied against future material purchases and will be funded through our strong balance sheet and robust operating cash flow. In parallel, we intend to continue repurchasing shares to manage dilution. Now, let me come back to where I started. I joined Marvell because I believe the company has an exceptional opportunity ahead of it. Having now stepped into the CFO role, I'm even more convinced of the incredible strength of our technology portfolio, our deep customer relationships, and the substantial long-term growth potential. Our job from here, it's to execute with discipline as we efficiently scale the company to capture that opportunity and ensure that our growth translates into expanding margins, strong cash flow, and compelling returns for our stockholders. I'm honored to be Marvell's CFO at such an important point in the company's evolution, and I look forward to working with Matt and the rest of the team to deliver on the incredible opportunity we see ahead. With that, we're ready to start Q&A. Operator, please open the line and announce the instructions. Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. In the interest of time, please restrict yourself to one question only. If you have additional questions, please rejoin the queue. At this time, we will pause momentarily to assemble our roster. Our first question comes from Tom O'Malley with Barclays. Please state your question. Tom O'Malley, Analyst, Barclays: Hey, guys. Thanks for taking my question. Appreciate it, and good results. I wanted to ask first on the warrants with Google. Obviously, a very robust relationship over a multi-year period of time. I would love if you could give a little color on what is contributing to that revenue. Obviously, you have an inference accelerator, but you talked a lot about XPU attach, which you guys did kind of start the industry standard on in terms of defining. So maybe, what XPU attach are you excited about there? Any sort of color you can give us on the percentage of contribution between the inference accelerator and some of the attached that you are seeing there. Matt Murphy, Chairman and CEO, Marvell Technology: Yeah, great. Hey, thanks, Tom. Good to hear from you. I think you captured it well. It is a very exciting time for Marvell. This engagement and warrant is significant. You can see that in the scale of the opportunity we have. As you pointed out, a couple things I would just validate. The first is it is very broad-based. It is a number of products and product lines, which is very exciting. It includes inference accelerators, as you mentioned, also storage controllers, NICs, memory interface controllers, near memory compute, a whole bunch of different products. You are right, we did define what we call the XPU attach category a couple of years back. Actually, we gave quite a detailed view of that in our June 2025 custom silicon event. I think all of our projections to date have been under called, meaning that that opportunity continues to get more and more significant. So it is a broad set of products, Tom, that are covered here, and it is very broad-based in terms of where we can engage and where we are going to contribute. I would not call out any one of them at the moment specifically, but all of them in total, you can see represent. If you look at the total envelope of the opportunity, it is just massive for Marvell and game-changing at the sort of peak performance of what could be achieved now over the next six and a half years. Operator: Thank you. Your next question comes from Harlan Sur with J.P. Morgan. Please state your question. Harlan Sur, Analyst, J.P. Morgan: Yeah, good afternoon. Thanks for taking my question, and welcome to the team, Dan and Ross. Matt, given the Google commercial program you signed back in late July, $120 billion in cumulative reps over six years, if you hit all of your milestones, that puts you, if you just annualize it, at about $18.5 billion per year in revenues just in Google XPU attached custom ASICs, right? I actually thought that that would start to show up in FY 2028 or your calendar 2027, but given your guidance, looks like custom is still going to be around $5 billion-$6 billion in calendar 2027. Maybe some of the big programs associated with this commercial agreement are more back-end loaded. Maybe the better question is, the team has previously targeted $10 billion-$11 billion in custom revenues in FY 2029 or calendar 2028. What does that number look like now based on the Google commercial agreement and some of the new programs associated with the agreement? Matt Murphy, Chairman and CEO, Marvell Technology: Yeah. Great questions, Harlan. Thank you. First, you're right. If you look out to next year, we have comprehended already revenue that would come as part of this warrant in our numbers. That's because some of these programs obviously are already in flight or have already started. But the programs ahead of us that are either in execution or just starting production, those will contribute much more significantly in FY 2029. For next year, all I've said, by the way, is that custom is going to over double. So I haven't capped it, I haven't sized it exactly, but it is going to over double next year. Then you look out to FY 2029, where in our last call, I talked about a $10 billion kind of plus number for custom in FY 2029, which isn't a new number, by the way. That was something that we outlined back in June 2025, and even back in April 2024, we were talking about custom revenues in the $8 billion-$10 billion range. So we've had a consistent view of what that can look like. This opportunity with this customer greatly Greatly increases the revenue opportunity for us in custom with some of that potentially starting in 2029. I am not going to size it on the call here today, but you should assume with our investor day coming up, Harlan, the Marvell team, we always do a thorough job in our analyst investor days. So you should expect a very robust, detailed review of how we step through the revenue, not just through fiscal 2029, but really out until the end of the decade. So we're excited to present that to everybody, which will then really help us contextualize the scale of the warrant that we just signed, along with all the other exciting programs we have in custom. So if you don't mind, hold tight on that one. There'll be more to come. But clearly there's a lot of upside bias in those numbers in fiscal 2029 and beyond in custom. Harlan Sur, Analyst, J.P. Morgan: Yeah, absolutely. Looking forward to it. Thanks, Matt. Matt Murphy, Chairman and CEO, Marvell Technology: Yeah, you're welcome. Operator: Your next question comes from Vivek Arya with Bank of America Securities. Please state your question. Vivek Arya, Analyst, Bank of America Securities: Thanks for the question and best wishes to Dan and Ross. Matt, I was hoping you could give us an update on the other large XPU program that you're planning to start in the next year. I think the assumptions there are quite modest for next year, $600 million or $700 million or so, and I was hoping you could give us an update on that. What is the opportunity for that program over time? Because that hyperscaler is just getting started on their XPU type, like every one of their competitors, I imagine they want to make that XPU program much larger than what it is. So, give us maybe an update on what the progress is. Can this be a really meaningful program for you over time? Matt Murphy, Chairman and CEO, Marvell Technology: Yeah, thanks, Vivek. We're very encouraged by our custom setup for next year on the double plus. That new program is clearly part of that. We've been judging that, I think, in a very conservative and practical manner as we've made progress. We continue to make progress every quarter, not only on design execution, but also supply commercials and figuring out the envelope of that opportunity. That's only gotten better. So without quantifying it exactly, what I would say is from the last call, if you look at the $1.5 billion raise we're doing for next year, just at a high level, it's broad based. Some of that is from custom next year. There's also actually get another question on this one, but probably the most meaningful part of the next year raise is actually from the scale-up optics, switching in other areas, but custom is definitely part of it, Vivek. Even when we size that opportunity, which goes back to a couple of years, we've always said that that is probably one of Marvell's largest revenue opportunities we have, and that's still the case. We're very encouraged by the prospects of this project. There'll be more to come, but it certainly is tracking, and we feel very good about next year and that layering in the year after and beyond. Operator: Thank you. Your next question comes from Aaron Rakers with Wells Fargo. Please state your question. Aaron Rakers, Analyst, Wells Fargo: Yeah, thanks for taking the question and welcome, Dan and Ross. Maybe kind of building on that last question a little bit, Matt, if you can maybe talk a little bit about what you're architecturally seeing in CXL and how that's evolving, obviously with the Structera product, and it seems to be a broadening ecosystem around that. Then, similar on an architectural perspective, any update on, you just touched on scale-up, optics, the Celestial AI numbers that you've previously outlined. How have those progressed relative to your initial targets? Thank you. Matt Murphy, Chairman and CEO, Marvell Technology: Sure. Let me start with CXL, and then we'll talk about scale-up optics. With respect to CXL, this investment we made organically over the years has really evolved, and it's turning out to be a home run for a couple of reasons. As you might recall, this started off as a server-centric, traditional compute-centric memory architecture. It turns out all that investment we've made is just ideal for memory expansion and inferencing. We're seeing this technology now getting deployed at multiple hyperscalers with varying architectures, by the way, in extremely high volumes. One is just the demands of inferencing require it. The other is what we're seeing is as a result of the scarcity that's out there in memory, customers are modifying and adjusting their plans to actually use more of this type of technology. This is continuing to have strong upward bias. We've actually secured additional design wins in this area in the last couple of quarters. We're going to outline all of that at the Investor Day, but that opportunity, Aaron, turns out to be massive. I think it's a case where the pivot we made about five years ago, where we really put the pedal to the metal on organic internal investment on a number of new technologies, this is one that's really bearing fruit. Very exciting, and you should expect to see a very comprehensive memory expansion section in our Investor Day presentation. On scale-up optics, this is turning out to be, I think, one of the most exciting areas for us. Last quarter, the way we framed it was we had the Celestial AI CPO Photonic Fabric solution, which for reference, was about $150 million for next year. We had actually said that overall scale-up optics inclusive of that was about $300 million as a category. That includes NPO, by the way. As I said in my prepared remarks, all of that together, scale-up optics, is accelerating even further from the number I gave you last quarter. A significant driver of the $1.5 billion raise we have for next year, Aaron, is coming from that area. It's not just a one-trick pony. I think that's the thing I want to stress to you is the CPO is absolutely a key part of it. It will be for next year and certainly the year after. But if I look at the opportunity set that's happening now at a much faster pace, in parallel with the CPO programs we have, is for NPO. In NPO, we participate through a wide variety of design wins we have and partners. Some of those are with our broadband analog products in silicon germanium, both TIAs and drivers, which we have a significant market share and content, and also on our own organically developed NPO solution, which we call our light engine, which we've been in development on for several years, and we've shown it off at OFC for several years. All of that as a category, Aaron, is really how we think about the business. Certainly, Celestial and Photonic Fabric is a key part of that. But what I want to stress is that this is not an or, it's an and. It's a little bit analogous to when people thought, well, there's 800G DSPs, and then they're going to move to 1.6T, and it's all going to just cut over. That's not how this works anymore. Our customers have varying architectures that they're pursuing. They have a number of different solutions that they're going to implement simultaneously. We see this as an and, not an or, and I think the magnitude of our scale-up optics opportunity next year is much larger than we thought just a quarter ago. The year after is going to be, I think, way larger than I sort of could have ever comprehended back even last year when we were looking at Celestial. If you look at the solution we're providing, which will be my last comment, we are pedal to the metal on our switching roadmap and coupling those optical solutions with our switches, both UAL and ESUN, as well as being able to seamlessly integrate and architect with our customers on the XPU/GPU side. All of that together, and having the end-to-end link that we are able to provide and the entire solution and the scale in manufacturing, R&D, the diversity of all the technologies we have in terms of packaging, modulator technologies, silicon photonics, a decade of experience there, it is a massive opportunity, and Marvell is very uniquely positioned to participate in it. We could not be happier with the Celestial team. They have integrated well. They are a key part of the program. This thing is going to be a much bigger overall business for Marvell. Thanks. Aaron Rakers, Analyst, Wells Fargo: Thanks, Matt. Operator: Your next question comes from Joe Moore with Morgan Stanley. Please state your question. Joe Moore, Analyst, Morgan Stanley: Thank you. Along the same lines, can you talk about your progress in copper scale up? You mentioned the sort of success across the three protocols. How do you think about copper scale-up as it transitions to optical? Are those initial successes foundational to what you do in optical, or are those sort of two separate decisions? Matt Murphy, Chairman and CEO, Marvell Technology: Yeah. Thanks, Joe. I think you're talking about from a switching perspective, right, as we implement those Joe Moore, Analyst, Morgan Stanley: Yes Matt Murphy, Chairman and CEO, Marvell Technology: those electrical/copper solutions, and then how does that success translate when we move to optical. A couple things. One is on the Ethernet side, we've seen great traction and success with our Teralynx architecture, which came from the acquisition we did of a company called Innovium back in 2021. That business has a significant head of steam on it. We've expanded the customer base. We're driving significant revenue there, and we've proven to the market that we can deliver these solutions in volume. That translates itself, Joe, very seamlessly to scale-out. In fact, we're seeing even at 100T, our scale-out solutions be applicable to scale-up as well. We're driving that independently of the optics or not. Same thing on UAL. We're aggressively investing in UAL switching. That product development's coming along nicely, and we certainly can intercept any electrical or copper-based solution there. What customers really want to see, though, and that's why I'm spending time on it, is that's all great, and at this point, they trust us that we can deliver these very complex switching products because we've done it already. Which, by the way, is no small feat. There's been a lot of companies that have tried and failed to do these radical size, very complex Ethernet switches, and it's only getting harder with the SerDes performance and the speeds. But the next level of that, Joe, is that you then need to show a compelling, clear roadmap that you can execute with credibility on the optics side, both NPO and then all the way to full integration on CPO. Our discussions, while certainly there's opportunities in the next few years that are going to come and we're going to have on the copper side, I think why we really win long term is because we convince our customers we can execute on the full end-to-end, which really is what our customers are looking for. At the end of the day, especially on scale-up, they need to bookend the link, and they need to trust that on both sides of it and everything in between, they've got a partner that can handle that job. Point solutions at this juncture, we believe, are not going to get it done. You really have to have the end-to-end portfolio. That's what we're hearing from our customers, by the way. The existing silicon will do fine. It'll do great. But I am even more excited about the optics attach once that gets going over the next few years, because it just effectively almost doubles the SAM of the switching, in terms of the attach you can get. Thanks. Operator: Your next question comes from Ben Reitzes with Melius Research. Please state your question. Ben Reitzes, Analyst, Melius Research: Hey, guys. Thanks for the question. Hey, Dan and Ross. Hey, Matt. I want to go back to the Google deal. I think people are just wrestling with this, and I realize that you have a great Analyst Day coming, so don't shoot me. For FY 2027, if you look at the $120 billion over the course of the years, that's about $18 billion a year. At the $120 billion, divided by 6.5. That's like adding an FY 2028 Marvell every year. I realize that we don't know how much is incremental versus what's already in your guides, but are we talking like FY 2029 and FY 2030 big step-ups as a result of this incrementally? Because these numbers are huge, and I know you're going to tell us at the Analyst Day, but I think we're all just trying to figure out how high to go in those out years, and is it at the comparable margin? Just any more color, if you're in our shoes, how we should handle it into Analyst Day or just wait. That would be great. Thanks. Matt Murphy, Chairman and CEO, Marvell Technology: Yeah. Hey, Ben. Thanks. By the way, fully valid question. When you look at the scale of this, your math is not wrong. What you can conclude from what I am saying is because most of this is comprehended already in next year, the big impact would be in 2029 and beyond. So if you took the full performance and the full opportunity, then you are right. It is just a monster number. What I would say, we do need the Analyst Day, though, I think you guys understand, to contextualize it and probably show some ranges of outcomes. But you should assume in that timeframe that on the custom side, these numbers would be a lot larger than overall custom than anybody has been modeling so far. I think there has been doubt for years that we could even do the $8 billion-$10 billion. This should give, I think, investors comfort that we secured a pretty big set of programs, not just here, but across the broad range of our customer set. On the margins, just in general, this is custom business and we have got a financial model for custom. We have got a financial model for our standard and merchant products. It would be in line with that. But it is significant, and I am not able to quantify it today for you, but you should assume starting in FY 2029 beyond, whatever you have modeled previously prior to the warrant for custom numbers definitely goes higher. How big, we will be happy to show the range of outcomes. But in the context of where Marvell was, Ben, we were an $8 billion company last year. We just took everybody to $12 billion this year. We have not even finished that year and 18 next year. The rough math you do at full performance provides an incredible step up to the scale of the company if all those programs that come to fruition at their max performance. But I think what this is helpful to show is just the scale of the opportunity in general that Marvell is participating in, because we have significant engagements across the customer base. This one is a little unique because of the warrant that given the magnitude and the equity side, we needed to disclose it. But I think you have seen over the last couple of years, we have entered into very strategic partnerships with other big players in the AI market, and some of that we have done publicly and some of that we are doing just on our own. I think one takeaway I would have right now is just a significant validation of where Marvell sits in the market today, and we are very honored to be a part of the ecosystem, the TPU ecosystem. We will see how it plays out. Ben Reitzes, Analyst, Melius Research: All right. Matt Murphy, Chairman and CEO, Marvell Technology: I hope that's enough for now. I want to save a little bit of firepower for my Investor Day. Ben Reitzes, Analyst, Melius Research: No, thank you, and I appreciate that, and congrats on that deal. I'll see you soon. Matt Murphy, Chairman and CEO, Marvell Technology: Yeah. Thanks, Ben. Operator: Your next question comes from C.J. Muse with Cantor Fitzgerald. Please state your question. C.J. Muse, Analyst, Cantor Fitzgerald: Yeah, good afternoon. Thank you for taking the question. I think one of the more interesting takeaways from Nvidia's report last night is Jensen's view of the fungibility of compute networking and memory to deliver performance in the AI data center in a cost-constrained world. Considering your vast experience and expertise across all these three areas, how is this backdrop, particularly in light of where memory pricing is today, support your new design wins? Is it really focused on the memory controllers, custom HBM to increase shoreline, or is it also driving strength on the XPU side as well? Would love to hear your thoughts there. Thank you. Matt Murphy, Chairman and CEO, Marvell Technology: Yeah. Thanks, C.J. No, first of all, I see the same thing. I'm very mind-melded with what they talked about. I think at the broadest level to start, it definitely, this fungibility requirement, given the dynamic nature of the market and some of the constraints we're seeing, some are supply constraints, some are power constraints, some are architectural constraints. Having our ability to very quickly execute custom and semi-custom designs or modify our products or adapt to shifting architectures at Marvell, it's a key capability, this flexibility that the company has, because we've built a business around being able to customize quickly, and it's been in our DNA even from 2021 Investor Day. We talked about how every hop in the network, at some point, was going to get some level of customization, and it wasn't going to just be the accelerator. Here we are five years later, and that's playing out. CXL and memory expansion is one example, where very quickly customers are adapting. There's also other opportunities where to optimize for inference, as an example, and this was one of the things that was in the warrant, but it's a trend in the market. AI inference accelerators, that's another trend in the market you see. I think companies are all looking at how they can maximize their performance, how they can maximize the cost and performance relative to the tokens generated. We're in a monetization era, so this stuff really matters. It went from training very quickly to inference and to companies now monetizing this. We're seeing a big pickup in activity, and it's not just on the custom side. This discussion we had earlier about CPO and NPO and optics and copper, that's all moving very fast because, again, companies are architecting at a speed we really haven't seen to make sure that they have the most competitive solutions. Marvell fits right in there, CJ, on a number of fronts. It's not just, quote, "our custom revenue," but it's the solutions underneath we provide, including our networking and our storage and memory in our compute. Operator: Thank you. Your next question comes from James Schneider with Goldman Sachs. Please go ahead with your question. James Schneider, Analyst, Goldman Sachs: Good afternoon. Thanks for taking my question. I was wondering if you could maybe just give us a little bit of update in terms of the growth rate for connectivity you expect. I think, Matt, you outlined those growth rates for both this fiscal year, next fiscal year, last quarter. Can you maybe just give us an update on where those are landing given the incremental strength? Sounds like most of that's being driven by that subsegment right now. Matt Murphy, Chairman and CEO, Marvell Technology: Well, yeah, thanks, Jim. As I said, the way to think about it is the $500 million raised for this year and the $1.5 billion for next year is broad-based. Connectivity clearly is a driver, and I say connectivity at a broader level, because underneath that, we spent time talking about scale-up optics. That's one, which is our NPO and CPO and SiGe products. But it's also just the transceiver market for scale-out and optical DSPs going into that segment. That's upsized versus the prior growth rates we talked about. So that's in the $500 million and the $1.5 billion. That business continues to be absolutely on fire, and we're executing well there. And then within connectivity as well, as a broader segment, you also have our switching, which is biasing higher this year, but also from our last quarter update, again next year. You really have those three plus, I'd say, custom that are all floating up versus our prior expectations. But Jim, we're really seeing broad-based strength. I think it's across almost all of our product lines when we look out, but those are a few of the ones I'd highlight. And you're right, connectivity is a bigger bucket, is probably the largest driver net of the $1.5 billion raise. If I just look at all those pieces I mentioned underneath, scale-out, scale-up, and switching. James Schneider, Analyst, Goldman Sachs: Thank you. Operator: Thank you. And our last question for today comes from Quinn Bolton with Needham & Company. Please state your question. Quinn Bolton, Analyst, Needham & Company: Thanks for squeezing me in. I guess, Matt, just wanted to come back to the near-term guidance. Within data center, I think you guided up greater than 20% sequentially. But with margins coming down 90 basis points quarter-on-quarter, is custom the fastest-growing segment within data center that drives that lower margin, or is there some other mix going on within data center kind of driving the lower 90, or sorry, the 90 basis point lower guidance for the October quarter? Thank you. Matt Murphy, Chairman and CEO, Marvell Technology: Yeah, sure. Thanks. I will tee it up, but I am going to have Dan comment because you guys are sparing him too much on this call. He is the new CFO. You are supposed to be asking him questions, and you are asking me all the questions. Joking aside, you can clearly see it in the numbers. Stronger Q3 guide implied much stronger Q4 guide. We did say custom was ramping meaningfully in the second half. I said that. Dan said that. Dan, maybe why do not you make a few comments on the margins and how you see that playing out, and also through next year as well as we grow. Thanks. Dan Durn, Chief Financial Officer, Marvell Technology: Sure. Just jumping in, we clearly see the performance of the company doing well. You see the acceleration in Q2, followed with acceleration in Q3, followed with acceleration in Q4. Part of the acceleration story in Q3, as you point out, mix is the primary driver. We have got a strong ramp in custom, and so you can see that play out in the profiling of the margins. Not a surprise. We have been signaling that custom ramp for quite some time. As we window into Q4, that strength, we are signaling a bigger step-up, much larger step-up from a revenue standpoint if you roll in the $12 billion annual target. That step-up in Q4 is broad-based. You see it not only in custom, you see it in connectivity, you see it in a rebound in comm and other. So broad-based performance. Net it all out, we see Q4 gross margins in the same target range as Q3. If we use the back half of the year as a jumping-off point and think about how that looks going into FY28, that broad-based strength continues. We take the momentum exiting this year, and we push that forward into next year, and it is across custom, it is across connectivity. All parts of the business are higher. They are up. Gross margin depends on ultimate mix. My preliminary view is gross margins next year are going to be in a similar range, same range as we are exiting this year. So back half of this year, same range for FY28. So we feel good about the performance of the company. We are going to drive growth at this company. We are going to do it with discipline. And we are going to deliver strong margins. But when we think about that margin profile, operating margin still has significant leverage embedded in it. You are going to see it up in Q3. You are going to see us entering our target long-term model range, 38%-40% exiting this year. You will see us achieve the high end of that range as we progress through FY28, and we are going to reset that long-term target model here in the coming weeks at the Analyst Day. So we feel good about the performance of the company and the broad-based strength. Quinn Bolton, Analyst, Needham & Company: Thanks, Dan. Operator: Thank you. Ladies and gentlemen, thank you all for your participation. This does conclude today's teleconference. You may disconnect and have a wonderful day. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
[7]
Marvell Raises Its AI Ambitions Again, but the Market Wanted More...
Marvell still delivered a solid release. Q2 revenue rose 37% to $2.74bn, versus $2.71bn expected, while adjusted EPS reached $0.94, versus $0.92 anticipated. The group is targeting Q3 revenue of $3.15bn, plus or minus 5%, and adjusted EPS of $1.10, plus or minus $0.05, versus $3.03bn and $1.07 expected, respectively. Data center keeps accelerating The main positive came from its outlook. Marvell now expects about 60% growth in its data center business (datacenter) for FY 2027, versus around 50% previously, followed by growth above 60% in 2028. It is now targeting revenue of about $18bn in 2028, up from $16.5bn previously, implying nearly 50% y-o-y growth. That acceleration is not riding on a single product. JPMorgan notes that "the core data center business continues to strengthen," with growth spanning from custom ASICs to interconnect and networking solutions. Optics remains particularly strong. Jefferies says that "trends in optics remain extremely robust," driven by demand for 800G, the ramp of 1.6T, and the buildout of NPO and CPO architectures. The broker now expects 25% sequential growth in optics in the October quarter, versus 15% previously. Custom ASICs are also expected to accelerate, with 27% sequential growth anticipated for the October quarter, according to Jefferies. For FY 2028, that business is expected to more than double, notably supported by Amazon's Trainium 3 and several programs developed for major technology groups. That growth must remain profitable. Marvell forecasts a gross margin of about 58% in Q3 and aims to maintain that level in 2028 despite the ramp in custom silicon. The group is also targeting a long-term operating margin between 38% and 40%. Google, but no upside surprise in the forecasts yet It is mainly the partnership with Google that left the market wanting more. The deal could represent up to $120bn in revenue over six years if all planned targets are met. That figure, however, reflects a conditional maximum potential rather than guaranteed orders. The agreement is also particularly broad. It covers, among other things, AI accelerators for inference, storage controllers, networking equipment, memory interface controllers, and near-memory compute solutions. But the Google-related revenue expected through 2028 was already baked into Marvell's outlook. Jefferies called it "somewhat disappointing to learn that Google had already been incorporated" into the existing forecasts. JPMorgan reached the same conclusion, noting that "investors were hoping for more explicit quantitative details." In particular, the market was looking for clarity on the amount of Google-related revenue and its timing. The partnership's incremental upside therefore sits mainly from 2029 onward. Marvell is expected to provide more details at its investor day on October 6. Until then, the market will have to live with a paradox: the outlook for 2027 and 2028 keeps improving sharply, but part of the expectations around Google were already embedded in the forecasts.
[8]
Marvell selloff deepens as investors seek clarity on Google AI deal payoff
Aug 28 (Reuters) - Chip designer Marvell Technology's shares fell more than 8% to $221.6 in early trading on Friday as investors looked beyond the company's solid results in search of fresh clues for long-term growth. Marvell has become a market darling fueled by the AI spending boom as Big Tech races to adopt custom chips for greater cost efficiency and performance, powering its shares to nearly triple this year. However, with Big Tech's AI spending set to top $740 billion this year, investors had come to expect increasingly stronger results from companies tied to the boom. Marvell's higher revenue forecasts for fiscal years 2027 and 2028 were also overshadowed by questions over how quickly its newly announced Google custom-chip deal, which could generate up to $120 billion in revenue through fiscal 2033, would begin contributing meaningfully to revenue. "Expectations were higher, mostly because of the Google deal," analysts at Morgan Stanley said, adding that its contribution was already largely reflected in the company's prior guidance. CEO Matt Murphy said Marvell's custom revenue targets through fiscal year 2028 already reflected some Google-related revenue and that it would contribute much more significantly in fiscal year 2029. Friday's rout puts the company on course to erase more than $17.4 billion in market value, if the losses hold. "While the quarter and near-term guides weren't overly exciting vs expectations, a combination of the GOOGL deal, prospects with Microsoft and AI connectivity upside could point to some big figures that make $20 in EPS power before the end of the decade look realistic," Melius Research analysts said in a note. At least eight brokerages raised their price targets on Marvell following the results, with the median target of $275 implying a 13.8% upside from Thursday's close, according to data compiled by LSEG. Thanks to more data-center revenue, the company expects revenue to grow about 45% in fiscal year 2027 and reach about $18 billion in fiscal year 2028. Marvell trades at a premium compared to rival Broadcom, with a 12-month forward price-to-earnings ratio of 58.41 versus 32.15, according to data compiled by LSEG. (Reporting by Joel Jose in Bengaluru; Editing by Pooja Desai)
Share
Copy Link
Marvell Technology shares dropped 8% despite beating Q2 earnings estimates and securing a landmark $120 billion Google AI deal. Investor concerns centered on when the custom AI chips agreement will meaningfully contribute to revenue, with CEO Matt Murphy indicating the biggest impact arrives in fiscal 2029 and beyond.
Marvell Technology Shares Drop Despite Strong Q2 Performance
Marvell Technology shares fell 8% to $221.63 on Friday despite delivering second-quarter fiscal 2027 results that exceeded analyst expectations
1
. The semiconductor designer reported revenue of $2.74 billion and adjusted earnings of 94 cents per share, narrowly topping the consensus estimates of $2.71 billion and 93 cents per share2
. The midpoint of Marvell's third-quarter revenue forecast also beat estimates at $3.15 billion2
. However, in a stock that has rallied 187% over the past year, beating estimates by a penny wasn't enough to satisfy investors who had set the bar considerably higher5
.Google AI Deal Revenue Timing Creates Investor Concerns
The primary source of disappointment centered on timing expectations for Marvell's Google AI deal, which could generate up to $120 billion in revenue through fiscal 2033
1
. Jefferies analysts called it "somewhat disappointing" that there wasn't more immediate upside from the Marvell's Google AI chip deal reflected in the company's near-term projections2
. CEO Matt Murphy clarified that Marvell's custom revenue targets through fiscal year 2028 already reflected some Google-related revenue, but the agreement would contribute "much more significantly in fiscal year 2029"1
. Morgan Stanley analysts noted that investor expectations were higher, adding that the deal's contribution was already largely reflected in the company's prior guidance1
.
Source: Market Screener
Custom Silicon Business Expansion and Long-Term Revenue Outlook
Marvell Technology raised its fiscal year 2027 revenue outlook by $500 million to approximately $12 billion, representing about 45% growth
1
. More significantly, the company increased its fiscal 2028 revenue forecast by $1.5 billion to about $18 billion, up from its prior target of about $16.5 billion1
. Needham noted management guided fiscal year 2028 revenue growth to more than 50% year-over-year, up from a prior outlook of 45%3
. Matt Murphy described the Google opportunity as "a monster number," suggesting that Wall Street's existing models may already be too low and that custom silicon numbers "definitely go higher" than previously modeled4
.Data Center Revenue Drives AI Infrastructure Growth
Data center revenue reached $1.83 billion, representing 76% of Marvell's total revenue with 27% year-over-year growth
5
. AI infrastructure and cloud computing now drive over 90% of this segment, demonstrating the successful transition from legacy end-markets to AI-focused products5
. The company expects data center revenue to grow more than 60% year-over-year in fiscal year 20283
. Rosenblatt analysts attributed the Marvell revenue outlook increase to scale-out interconnect, switching, and a custom silicon ramp in the second half of fiscal year 20273
.
Source: Market Screener
Broad Product Portfolio Beyond Single Custom AI Chips Win
Matt Murphy emphasized that the Google agreement extends far beyond a single custom AI chips program, spanning inference accelerators, networking interface cards, storage controllers, memory interface controllers, near-memory compute, and the company's XPU attach portfolio
4
. "It's a number of products and product lines," Murphy said, describing the engagement as "very broad-based"4
. Management confirmed that custom silicon will more than double to approximately $4 billion in fiscal 2028, with a $10 billion fiscal 2029 target reaffirmed5
. The company also has over 50 new opportunities in its pipeline with $75 billion in lifetime revenue potential5
.Related Stories
Stock Valuation and Analyst Reactions Drive Market Response
Despite the pullback, at least five brokerages raised their price targets on Marvell Technology following the results, with the median target of $275 implying a 13.8% upside from Thursday's close
1
. Rosenblatt analysts reiterated a Buy rating with a $300 price forecast based on 28 times their fiscal 2029 earnings-per-share framework, while Needham raised its price forecast to $300 from $2703
. Marvell shares currently trade at a premium compared to rival Broadcom, with a 12-month forward price-to-earnings ratio of 58.41 versus 32.151
. Benchmark's Cody Acree noted that the guidance increase was "insufficient given the stock's recent performance," especially after NVIDIA's earnings the day before set an even higher bar for the AI supply chain5
.
Source: Benzinga
What to Watch: Upcoming Catalysts and Supply Chain Investments
Melius Research analysts highlighted that "a combination of the GOOGL deal, prospects with Microsoft and AI connectivity upside could point to some big figures that make $20 in EPS power before the end of the decade look realistic"
1
. Citi analysts emphasized comments from Marvell executives that the company expects a "significant acceleration" in its custom chip business in the back half of this fiscal year2
. The company is making approximately $1 billion in prepayments starting Q2 to lock in capacity, signaling strong demand visibility and addressing potential supply chain risks5
. Rosenblatt pointed to Marvell's analyst day in early October, when management is expected to provide additional detail on long-term revenue and margin targets3
. Even with Friday's decline, Marvell remains one of the best performing stocks in the S&P 500 this year, with shares up over 160% in 20262
.References
Summarized by
Navi
[1]
[3]
Related Stories
Google Taps Marvell for AI Chips in $12.2 Billion Deal, Diversifying Beyond Broadcom
19 Aug 2026•Business and Economy
Marvell Technology's Stock Soars on Strong AI Chip Demand and Optimistic Q4 Forecast
04 Dec 2024•Business and Economy
Marvell Technology Forecasts Strong Q2 Revenue, Driven by AI Chip Demand
30 May 2025•Technology
Recent Highlights
1
OpenAI Agents Hacked Hugging Face After Creating Secret Message Board to Game Cybersecurity Test
Technology
2
Bill Gates Warns of AI Risks, Proposes Robot Tax and Human Reserved Jobs to Combat Disruption
Policy and Regulation
3
AI Drone With Nvidia Chip Kills Three Civilians in Ukraine's First Fully Autonomous Strike
Technology
Recent Highlights
Today's Top Stories
Don’t drown in AI news. We cut through the noise - filtering, ranking and summarizing the most important AI news, breakthroughs and research daily. Follow topics that matter to you and stay ahead.
