Marvell Technology stock jumped in premarket trading Wednesday after the chipmaker disclosed a warrant issued to Google worth up to $12.18 billion, tied to an expanded custom AI chip partnership. Broadcom, Google's incumbent supplier on the same program, fell in the same session, while Alphabet shares held steady.
Marvell Technology stock surged about 13% to 243.97 in premarket trading Wednesday after the company said it issued Google a warrant to buy up to 58,970,907 shares of its stock at $206.58 apiece. That stake is worth over $12 billion if fully exercised. Shares of Broadcom, a longtime partner on Google's tensor processing unit efforts, moved lower on the same headline.
Google warrant reshapes the custom silicon race
In a filing with the U.S. Securities and Exchange Commission, Marvell said it signed a deal with Google on July 29 to develop custom chips including AI inference accelerators, storage controllers, network interface controllers, memory interface controllers, and near-memory compute for Google's cloud and search business. Marvell then signed the warrant deal with Google on Tuesday, with the warrants vesting in quarterly installments through 2033.
According to MarketWatch: "The expanded partnership spans a comprehensive range of custom silicon programs" related to Google's tensor processing units.
Broadcom falls as Alphabet holds steady
Broadcom shares were down 2% in premarket trades on Wednesday. Broadcom signed a long-term agreement with Google in April to develop and supply future generations of custom AI chips for Google's next-generation AI racks through 2031, which is why the stock came under pressure on Marvell's announcement. Alphabet shares, meanwhile, were unchanged at $342.67.
Connectivity peers move higher
Astera Labs shares were up 1% to $307.42. Credo Technology shares rose 3% to $252.85 over the same stretch. The next catalyst for Marvell stock will likely be the company's fiscal second-quarter results due out late Aug. 27.
Sources: MarketWatch, Investor's Business Daily, 24/7 Wall St.
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