Marvell's $90 billion promise leans on a warrant that pays Google to keep buying
Marvell put a first-ever fiscal 2031 revenue target of $70 to $90 billion on the record Tuesday, from an $8.2 billion fiscal 2026 base. Every tranche of the Google warrant beneath it turns on purchases the filing itself calls discretionary.
Vincent Jiang · 3 min read
A $90 billion target on an $8.2 billion base
Marvell−5.41% — Marvell, down 5.41 percent today chief executive Matt Murphy used Tuesday's investor day in New York to set a first-ever fiscal 2031 revenue target of $70 to $90 billion, and to lift fiscal 2028 to $20 billion, the fifth figure in about a year and the third since May, when it stood at $16.5 billion 16. Shares, already up 238% this year, closed 5.8% higher at $287.01 after touching $301 25. Marvell booked $8.2 billion of revenue in fiscal 2026; before the event, analysts had fiscal 2031 near $47 billion 26.
Google gets paid in Marvell stock
The $120 billion of Google chip purchases in the headlines is a ceiling, not a contract 1. Marvell signed the custom-silicon agreement on July 29 and issued Google a warrant on August 18 for 58,970,907 shares at a $206.58 strike 3. Of those, 1,360,867 vest on the calendar in equal quarterly installments during the first year, purchases or no purchases 3. The rest vest in 240 equal tranches, one for each $500 million of custom-product revenue from fiscal Q3 2027 through fiscal 2033 3. The 8-K's word for the buying is "discretionary" 3.
The rebate is four cents on the dollar
Each tranche is roughly 240,000 shares 3. At Tuesday's close, the $80.43 spread over strike made a vested tranche worth about $19 million against $500 million of purchases: a rebate of nearly four cents on the dollar that widens as the stock climbs and vanishes below $206.58 23.
Fully vested, the warrant is about 6.6% of Marvell's 897 million basic shares; exercised in full, it moves $12.2 billion into the treasury 34. Google is being paid in Marvell stock to keep buying Marvell chips, and the other holders fund the rebate.
The 2031 target is up to 11 times the revenue Marvell just booked
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| FY2026 actual | $8.2B |
| FY2028 target (estimate) | $20B |
| FY2031 low (estimate) | $70B |
| FY2031 high (estimate) | $90B |
TD Cowen calls it de-risked; the warrant says partly bought
TD Cowen upgraded to buy on Wednesday at $350, up from $245, saying custom concentration and margin risk is "largely de-risked"; 41 of 45 analysts rate the stock a buy 5. Goldman Sachs−0.50% — Goldman Sachs, down 0.50 percent today stays Neutral at $220, Morgan Stanley−0.93% — Morgan Stanley, down 0.93 percent today Equal-Weight at $268 1. The custom ramp also carries a cost: third-quarter non-GAAP gross margin was guided down to 57.5% to 58.5% from 58.9% as the lower-margin business scales 4.
A $130 gap separates the street on Marvell's worth
Data
| Price target | |
|---|---|
| TD Cowen | $350 |
| Tuesday close | $287.01 |
| Morgan Stanley | $268 |
| Goldman Sachs | $220 |
The $90 billion promise rests on this: quarterly revenue up 81% in eight quarters
Data
| Revenue | |
|---|---|
| Q3 '24 | $1.52B |
| Q4 '24 | $1.82B |
| Q1 '25 | $1.9B |
| Q2 '25 | $2.01B |
| Q3 '25 | $2.08B |
| Q4 '25 | $2.22B |
| Q1 '26 | $2.42B |
| Q2 '26 | $2.74B |
The October 31 quarter is the first tranche test
The quarter ending October 31, guided to $3.15 billion, is the first in which a Google tranche can vest, and Murphy has promised "a significant acceleration in our Custom business beginning in the second half of fiscal 2027" 4. Until Google's buying shows up in the tranche math, the only shares guaranteed to vest are the 1.36 million that vest anyway 3.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
