Marvell Technology, Inc. (NASDAQ:MRVL) and Alphabet Inc. (NASDAQ:GOOGL) now have a much tighter AI relationship than a normal supplier contract. Marvell disclosed on August 19 that Google had signed a custom-silicon agreement covering products tied to its TPU ecosystem and received warrant for up to 58.97 million Marvell shares. Most vest in 240 tranches, with one tranche earned for each $500 million of custom-product revenue through fiscal 2033. That is where the $120 billion ceiling comes from.
For Marvell Technology, Inc. (NASDAQ:MRVL), the bull case is direct. Google gives the company another hyperscaler-scale custom-chip program while data-center revenue is already growing quickly. Marvell reported roughly $2.74 billion of quarterly revenue, data-center sales rose 46% year over year, and management raised fiscal 2027 and 2028 revenue outlooks to about $12 billion and $18 billion. If Google purchases ramp toward the upper end of the warrant schedule, the agreement could extend Marvell’s growth runway materially.
Photo from Marvell website
The bear case is mostly about timing and expectations. CEO Matt Murphy said the larger Google contribution is not expected until fiscal 2029, while Marvell had nearly tripled in 2026 before the latest earnings report. Reuters calculated a forward P/E of about 58.4 times, versus roughly 32.2 times for Broadcom. Google also continues to work with Broadcom, so the agreement should not be read as Marvell displacing another supplier across the TPU stack.
For Alphabet Inc. (NASDAQ:GOOGL), the payoff is different. Google gets another source of custom silicon spanning inference accelerators, networking, storage and memory-related products, while the warrants give it potential equity upside if purchases expand. That can diversify suppliers and give Google more control over the hardware economics behind its AI infrastructure. The bear case is that those purchases still have to generate enough cloud, advertising and AI revenue to justify the spending. The warrants are tied largely to discretionary purchases, so $120 billion is not a commitment, but approaching it would still mean very large hardware outlays over several years.
Hedge funds were moving toward both names before the August agreement. Insider Monkey’s database showed 96 hedge funds holding MRVL at the end of Q2 2026, up from 79 in Q1, while D.E. Shaw increased its position 658% to about 2.50 million shares. GOOGL was held by 275 hedge funds in Q2, up from 265, and Berkshire Hathaway increased its Alphabet stake 83% to roughly 106 million shares. As of August 14, about 28.39 million Marvell shares were sold short, around 3.25% of float. The question is different for each company: whether Marvell can grow into expectations already in its valuation, and whether Alphabet can earn enough on another layer of AI infrastructure spending to justify it.
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