Marvell Google AI Chips Spark Rally, Then Pare Gains

Marvell Technology shares jumped in premarket trading on April 20, 2026, after reports that the company is in talks with Google to develop two custom AI chips. The shares later pared gains as analysts questioned the deal’s materiality and execution risk.

Talks on Two Custom AI Chips and Timeline

Marvell is reportedly negotiating with Google to develop two processors: a memory-processing unit (MPU) designed to complement Google’s tensor-processing units (TPUs), and a separate TPU optimized for AI inference workloads. The companies aim to finalize the memory-chip design as soon as next year and then proceed to test production. Talks remain ongoing, and no contract has been signed.

Google seeks to expand its TPU roadmap and reduce reliance on external suppliers, aiming to diversify away from Nvidia’s GPUs. Marvell views the discussions as an opportunity to broaden its customer base beyond existing cloud partners such as Amazon and Microsoft. The company currently has a custom application-specific integrated circuit (ASIC) run-rate of about $1.5 billion annually across multiple cloud design wins.

Market Reaction and Company Profile

Marvell’s stock rose roughly 6% to 7% in premarket trading before moderating to a gain of 3.8% by late morning on April 20. The intraday swing followed analyst pushback around 11:22 a.m. ET, though the shares remained positive while Alphabet’s stock declined about 1%. Year-to-date, Marvell shares have doubled from an early-February low and climbed nearly 52% over the prior 12 trading sessions.

Some of Google’s existing suppliers reacted negatively to the news. Broadcom shares fell about 1.5%, and Celestica declined roughly 1%.

Marvell reported record data-center revenue of approximately $1.7 billion for fiscal 2026, with total revenue growing 42% year-over-year. The company held about $2.6 billion in cash at the end of the prior quarter. In March 2026, Nvidia completed a $2 billion strategic investment in Marvell tied to custom XPU designs, NVLink-compatible scale-up networking, and collaboration on silicon photonics.

Analyst responses were mixed. One major bank described a potential Google partnership as a meaningful positive for Marvell, enhancing customer diversification. A valuation service noted the shares traded nearly 39% above a modeled fair value while assigning a high-quality score. Another analyst cautioned that the stock’s valuation leaves little room for execution missteps and said the next two quarters will be critical to confirm whether design wins convert to revenue. A market forecast suggested Marvell could capture 20% to 25% of the $118 billion custom-ASIC market by the early 2030s.

Insiders sold about $25 million of stock over the past three months.

Outlook and Execution Risks

The companies target finalizing the memory-chip design by next year, followed by test production. The key near-term question is whether these early-stage talks will result in signed design wins that translate into revenue, especially given the stock’s rich valuation and highlighted execution risks.