Marvell Technology Inc (NASDAQ: MRVL) raised its fiscal 2027 and fiscal 2028 revenue outlooks to approximately $12 billion and $18 billion. The update follows a significant commercial agreement with Alphabet Inc's Google, which CEO Matt Murphy described as a "monster number" for long-term revenue potential.

The company reported second-quarter fiscal 2027 non-GAAP diluted earnings per share of $0.94, beating analyst estimates of $0.92. Net revenue for the quarter ended August 1, 2026 reached $2.739 billion, surpassing the consensus estimate of $2.710 billion.

Q2 Fiscal 2027 Financial Highlights

Data Center revenue was the primary growth driver, rising 46% year over year and 18% sequentially to $2,171.5 million. This segment now represents 79% of total net revenue, up from 76% in Q1FY27.

For the six months ended August 1, 2026, total net revenue was $5,157.1 million compared with $3,901.4 million for the prior-year period. Six-month non-GAAP net income was $1,583.9 million versus $1,125.5 million previously.

Updated Fiscal Outlook

Marvell increased its full-year revenue guidance for both fiscal years. Fiscal 2027 revenue is now expected to grow approximately 45% year over year to roughly $12 billion, up from a prior outlook of approximately $11.5 billion. For fiscal 2028, Marvell expects revenue of approximately $18 billion, an increase of $1.5 billion from the previous $16.5 billion outlook, representing expected growth of approximately 50% year over year.

The increase is driven by the data center business, which is now expected to grow by approximately 60% in fiscal 2027, up from a prior expectation of 50%. Data center revenue is projected to grow more than 60% year over year in fiscal 2028.

Q3 Fiscal 2027 Guidance

Marvell provided the following guidance for the third quarter of fiscal 2027, covering the three months ending October 31, 2026.

The company expects third-quarter revenue of $3.15 billion, plus or minus 5%, versus estimates of $3.03 billion. It also guided third-quarter adjusted earnings of $1.10 per share, plus or minus five cents per share, compared to estimates of $1.07 per share.

Strategic Developments and Custom Silicon

Marvell disclosed an expanded commercial agreement and associated warrant with Google. The warrant agreement encompasses custom programs already in execution, new design wins, and future potential programs. This includes products attaching to the TPU ecosystem such as AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory compute.

CEO Matt Murphy noted that the custom business, including XPU and XPU-attached products, is expected to more than double in fiscal 2028. He stated that Marvell's custom AI business would become "a lot larger than anybody's been modeling so far." Murphy cautioned that much of the revenue expected next year is already reflected in guidance, with the bigger impact arriving in fiscal 2029 and beyond.

Murphy 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. Murphy described the engagement as "very broad-based," suggesting analysts may still be underestimating the opportunity.

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. The immediate story is that Marvell is framing the deal as evidence that its position in AI infrastructure has expanded beyond what current consensus models reflect.

Balance Sheet and Cash Flow

As of August 1, 2026, Marvell held cash and cash equivalents of $3,932.8 million, up from $2,638.8 million as of January 31, 2026. Total assets stood at $27,554.6 million versus $22,285.3 million at fiscal year-end. Total liabilities were $9,023.0 million, and total stockholders' equity was $18,531.6 million.

Net cash provided by operating activities for Q2FY27 was $605.5 million, compared with $461.6 million in Q2FY26. For the six months ended August 1, 2026, operating cash flow was $1,244.3 million versus $794.5 million in the prior-year period. During the quarter, the company repurchased $200 million of common stock and returned $54 million through dividends. Total debt was $4.96 billion, with a gross debt-to-EBITDA ratio of 1.32 times and a net debt-to-EBITDA ratio of 0.27 times.

Management Commentary and Analyst Views

Matt Murphy, Chairman and CEO of Marvell, attributed the record quarterly revenue to continued strong demand across the Data Center portfolio. He noted that AI-related bookings remain robust and that the company is raising its revenue outlook for both fiscal 2027 and fiscal 2028. Murphy highlighted broad-based strength in Connectivity and a significant acceleration expected in the Custom business beginning in the second half of fiscal 2027.

Dan Dern, who joined as CFO in mid-June replacing Willem Menke, stated that the company expects significant operating leverage, with non-GAAP operating margin likely to enter the 38% to 40% long-term target range in Q4 of fiscal 2027. The company plans to showcase these growth drivers at its Investor Day on October 6, 2026.

Analysts responded positively to the updated 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. Rosenblatt attributed the increase to scale-out interconnect, switching and a custom silicon ramp in the second half of fiscal year 2027.

However, Marvell shares fell 9.96% to $217.41 on Friday, despite the record results. Investors appear concerned 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. The stock had risen approximately 186% year-to-date heading into the print.

A non-GAAP tax rate of 11.0% was applied to non-GAAP financial results for Q2FY27. The company calculated EPS under the two-class method following the issuance of Series A Convertible Preferred Stock on March 31, 2026. Marvell will discuss its Q2FY27 results on a conference call on August 27, 2026 at 1:45 p.m. Pacific Time.

Marvell Technology CFO confirmed the company remains on track to make approximately $1 billion in capacity prepayments to suppliers during FY2027. The update was provided during a recent conference call, highlighting the firm’s commitment to securing future manufacturing capacity.

Capacity Investment Outlook

The CFO’s statement indicates that Marvell is proceeding with its planned capital allocation strategy for supplier investments. The $1 billion figure represents a significant commitment to upstream partners, likely aimed at ensuring supply chain stability and meeting anticipated demand for its semiconductor products.

Key Takeaways

• Marvell is on pace to execute $1 billion in supplier capacity prepayments.
• The payments are scheduled for completion within FY2027.
• The guidance was reiterated during a corporate conference call.