Google deal gets Marvell only so far to $1 trillion
This digest was compiled by AI from multiple sources — links to the originals are below.
Google's Aug. 20 partnership with Marvell Technology leaves the chipmaker far from the $1 trillion valuation Nvidia CEO Jensen Huang predicted in June. Marvell shares ended Wednesday below $210 billion even though the agreement implies up to $120 billion in orders through early 2033.
Key Facts
- Google received warrants to buy nearly 59 million Marvell shares at $206.58 each, worth about $12.2 billion if fully exercised.
- The agreement allows Google to purchase up to $120 billion of custom Marvell products through early 2033.
- Marvell's market value ended Wednesday below $210 billion; reaching $1 trillion requires nearly $230 billion in additional sales.
- If Google ramps to just under $5 billion in quarterly orders, Marvell's 2032 sales estimate rises to about $62 billion, implying $270 billion in equity value at 4.4 times forward revenue after net debt.
- Google already has a relationship with Broadcom, the dominant supplier of bespoke AI chips.
The Google Agreement
Marvell Technology and Alphabet-owned Google struck a partnership on Aug. 20 that expands Google's custom AI chip supplier base. Google received warrants to buy nearly 59 million Marvell shares at $206.58 each, a slight discount to recent trading. The warrants vest in tranches depending on Google's order volume and are worth about $12.2 billion if fully exercised. The structure allows Google to purchase up to $120 billion of custom products through early 2033.
The $1 Trillion Gap
Nvidia CEO Jensen Huang in June called Marvell the next $1 trillion company, when the chipmaker was valued at about $200 billion. Marvell's market value ended Wednesday below $210 billion, leaving it far from that threshold. To reach $1 trillion, Marvell needs to generate nearly $230 billion in additional sales. Under a scenario where Google orders just under $5 billion each quarter, Marvell's 2032 sales estimate rises to about $62 billion, yielding $270 billion in equity value after net debt at a 4.4-times multiple. Google already has a relationship with Broadcom, the dominant supplier of bespoke chips, and the Marvell agreement adds a second supplier without displacing Broadcom.
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Google deal gets Marvell only so far to $1 trillion
