Broadcom vs. Marvell: Broadcom Stock Is Still the Better Buy After Alphabet's Announcement
Marvell (MRVL) rose after Alphabet (GOOGL) extended a partnership, while Broadcom (AVGO) fell. Marvell will supply components for Alphabet's TPUs, receiving warrants for 58.97M shares. Broadcom remains Alphabet's primary TPU design partner. Broadcom expects $100B in custom chip revenue by fiscal 2027, trading at a forward P/E of 18.5. Marvell's stock has tripled but trades at a higher P/E of 57.5.
How this was made
The 30-second read
Why it matters
The contract expands Marvell's AI‑chip exposure and could shift market sentiment toward semiconductor suppliers.
Market read
New Alphabet‑Marvell deal adds a sizable revenue source for Marvell and reinforces Broadcom's position, impacting the AI semiconductor space.
What to watch
Potential competition from AMD and MediaTek could affect long‑term partner dynamics.
Background
Alphabet extended its TPU partnership to include Marvell, adding new components and warrants, while Broadcom remains its primary design partner.
Ticker impact
Marvell announced a new partnership with Alphabet, receiving warrants for 58.97M shares tied to Alphabet's spend.
Potential upside as market prices in the new contract.
The deal adds a sizable revenue stream and warrants, indicating strong future cash flow.
Broadcom's shares fell despite the Alphabet‑Marvell deal, as the article argues Broadcom remains the better buy.
Limited downside; valuation remains attractive.
The article’s view is opinion‑based; no new contract for Broadcom was disclosed.
Market effects
Strengthens the AI‑chip and data‑center semiconductor sector.
U.S. semiconductor stocks may see increased interest.
Alphabet's AI hardware strategy influences global chip makers.
Counterpoint
Broadcom's lower valuation may still be more compelling despite short‑term dip.
Key entities
- CompanyAlphabet Inc.
AI and cloud services giant extending TPU partnership.
- CompanyMarvell Technology
Supplier of AI inference accelerators and other components.
- CompanyBroadcom
Long‑time TPU design partner for Alphabet.
