Marvell Technology stock gained on an expanded custom AI chip deal with Google that grants the search giant the right to purchase up to $12.2 billion in shares through a warrant, marking a significant shift in the competitive landscape for semiconductor suppliers to Big Tech.
On August 19, 2026, Marvell announced the warrant agreement, signed on July 29, 2026, which gives Google the option to buy up to 58.97 million Marvell shares at $206.58 per share. The shares rallied nearly 10% on the news, according to CNBC and Reuters.
The warrant is tied to a binding custom chip agreement that can generate up to $120 billion in revenue through fiscal 2033 if Google hits purchasing targets, according to Reuters. The deal covers a broad range of technologies used with Google’s tensor processing units, or TPUs, including AI inference accelerators, storage controllers, and network interface controllers, CNBC reported.
If Google exercises the warrant fully, it would hold roughly 6.7% of Marvell’s outstanding shares, making the company Marvell’s fifth-largest investor, Reuters reported. The warrant remains exercisable until August 18, 2033.
Morningstar analyst William Kerwin called it “a big win for Marvell,” though he noted the deal represents “a growing pie at Google for new sources, rather than a competitive displacement of Broadcom,” according to Reuters. Demand for in-house chips such as Google’s TPUs has surged as companies seek cheaper alternatives to Nvidia’s graphics processors and technologies better suited for inference, the process of running trained AI models.
The expanded partnership reflects a broader trend among hyperscalers. In October 2025, AMD struck a similar deal with OpenAI, agreeing to supply AI chips worth tens of billions of dollars in annual revenue while giving the ChatGPT maker the option to buy a stake of up to roughly 10% in the chipmaker, according to Reuters.
Challenging Broadcom’s Custom Chip Dominance
Google has largely worked with Broadcom on custom chips over the last decade. The companies expanded that deal in April 2026, according to CNBC. Broadcom’s stock fell about 5% on the day Marvell announced the warrant deal, as investors weighed the competitive implications.
Reuters noted that the Marvell deal “sets Marvell up to challenge larger rival Broadcom.” The warrant agreement signals that Google is diversifying its custom silicon supply chain, reducing its dependence on any single partner. This shift reflects growing leverage for hyperscalers in negotiating with semiconductor suppliers.
However, some investors later focused on the dilution risk. Marvell stock fell about 6% on August 21, 2026, as investors weighed the share dilution from the warrant, according to reports from AlphaSpread and 247 Wall Street. The warrant is exercisable at $206.58 per share, below the stock’s price at the time of the announcement, meaning dilution grows in direct proportion to the deal’s success—the more Google buys custom chips, the more shares it can purchase at the fixed strike price.
Marvell is scheduled to report earnings on August 27, 2026, according to reporting from Barchart, which may provide more clarity on the deal’s strategic importance and financial impact.
Sources
- Reuters — Marvell warrant details, deal structure, $120 billion revenue potential through fiscal 2033, Broadcom competitive context, Morningstar analyst quote, precedent with AMD-OpenAI deal
- CNBC — Stock rally details (nearly 10%), warrant terms (58.97 million shares at $206.58), TPU ecosystem products, Broadcom’s April 2026 deal expansion, Broadcom stock decline (5%)
- AlphaSpread — Marvell stock decline (6%) on August 21 due to warrant dilution concerns
- 247 Wall Street — Dilution analysis and warrant strike price context
