TradingKey - The AI chip market is gradually expanding from general-purpose GPUs dominated by Nvidia to custom accelerators designed in-house by cloud computing giants. Under this trend, Broadcom (AVGO) and Marvell Technology (MRVL) have become two of the most closely watched custom AI chip stocks in the US market.

The two companies share many business similarities, both providing custom chips, high-speed interconnects, and data center solutions to major cloud computing enterprises such as Google (GOOGL) and Amazon (AMZN). However, distinct differences exist between the two in terms of business scale, customer mix, and growth stage.

Broadcom boasts a more mature custom chip business, a broader customer base, and stronger profitability. While Marvell is smaller in scale, its AI business is growing faster, and it recently secured a major partnership for Google's custom AI chips.

As Broadcom prepares to report earnings, do the positive signals released by Marvell's latest results foreshadow continued acceleration in Broadcom's AI business? Considering earnings certainty for this year and future growth elasticity, which stock is more attractive: Broadcom or Marvell?

What Signals Did Marvell's Earnings Report Send?

The biggest highlight of Marvell's second fiscal quarter was not just that revenue continued to grow, but that its AI-related business kept accelerating.

The company's second-quarter revenue grew 37% year-over-year to $2.74 billion, with data center business revenue reaching $2.2 billion, up 46% year-over-year, noticeably outpacing overall revenue growth. The company expects third-quarter revenue to be approximately $3.15 billion, implying that sequential growth will remain rapid.

Marvell also raised its medium- to long-term revenue targets again. Currently, the company expects fiscal 2027 revenue to be approximately $12 billion and fiscal 2028 revenue to be approximately $18 billion, up from its previous targets of about $11.5 billion and $16.5 billion, respectively. Management expects the custom chip business to accelerate significantly in the second half of fiscal 2027.

Meanwhile, Marvell's 46% data center revenue growth, sustained strong AI orders, and the expected further acceleration of its custom chip business send positive industry signals for Broadcom, which is about to report earnings.

Marvell's results show that cloud computing companies have not significantly reduced AI infrastructure investments, with custom accelerators, high-speed switching chips, optical interconnects, and storage controllers remaining in a demand expansion phase. Therefore, Broadcom's revenue from Google TPUs, AI networking, and other custom XPU projects is also expected to stay strong.

FactSet expects Broadcom's revenue for this quarter to be approximately $29.49 billion, up about 85% year-over-year, with adjusted earnings per share expected at $3.24. Combined with recent results released by Marvell and Nvidia (NVDA), there is a relatively high likelihood that Broadcom will meet or slightly beat market expectations.

However, Marvell's stock price reaction after earnings also issued a warning: for companies already regarded as core AI beneficiaries, merely beating consensus estimates may still not be enough to drive the stock price up, and management's guidance for subsequent AI revenue will be even more critical.

Where Is Broadcom's Advantage?

Compared with Marvell, Broadcom's most obvious advantages lie in its scale, customer base, and profitability.

Broadcom has long been a key partner for major cloud computing companies in developing custom AI chips, with Google's TPU being one of its most representative projects. In addition, the company is expanding its partnerships with Meta, OpenAI, and other major AI customers.

These partnerships are typically not one-off chip orders, but long-term projects spanning multiple product cycles. As customers continue to upgrade their AI models and data center infrastructure, Broadcom gains high revenue visibility from next-generation custom accelerators.

Beyond custom AI chips, Broadcom possesses a competitive edge that Marvell will find difficult to fully replicate in the short term—AI networking.

When thousands or even tens of thousands of AI accelerators are connected within a single data center cluster, the importance of high-speed switching chips, networking equipment, and optical interconnects rises accordingly. Broadcom's long-term accumulation in the networking chip domain allows it to benefit from capital expenditures in both 'AI computing' and 'AI interconnectivity'.

In addition, Broadcom boasts stronger cash flow and a more diversified business structure, with free cash flow reaching $10.26 billion last quarter, representing 46% of revenue. Infrastructure software businesses such as VMware can reduce the impact of semiconductor order volatility on overall performance.

Will Google Tapping Marvell Threaten Broadcom?

Google's expanding partnership with Marvell is one of the most closely watched issues when comparing the two companies. Marvell has already entered Google's custom AI chip supply chain and may participate in more TPU-related accelerators, interface controllers, storage, and supporting chip projects.

However, Google's introduction of Marvell does not mean that Broadcom will be immediately replaced.

Broadcom's partnership with Google has been extended to 2031, covering future TPU products and related AI networking equipment. The design experience, intellectual property, and mass-production capabilities accumulated by both parties during their long-term co-development of chips are also difficult to fully transfer in a short period.

A more logical explanation is that as Google continues to expand its TPU deployment scale and push for external sales, the company needs to increase its number of suppliers to enhance supply chain resilience and reduce reliance on a single partner.

In the future, Marvell may secure orders for some new projects, inference chips, or supporting controllers, while Broadcom continues to participate in core TPU and AI networking platforms. Given that the AI infrastructure market is still expanding rapidly, it is not necessarily a simple zero-sum game between the two companies.

Google's supplier diversification may weigh on Broadcom's share in certain projects, but as long as overall AI chip demand continues to grow, both Broadcom and Marvell still have the opportunity to expand revenue simultaneously.

Broadcom or Marvell: Which Is More Worth Buying?

If comparing performance certainty in 2026 alone, Broadcom currently holds the advantage.

FactSet estimates that Broadcom's revenue for the current quarter will be approximately $29.49 billion, up about 85% year-over-year, significantly outstripping Marvell's overall revenue growth rate of 37% in its latest quarter. Broadcom's AI semiconductor revenue is expected to maintain rapid growth, and its custom chip and networking businesses also boast a more mature customer base, providing relatively high future revenue visibility.

Broadcom's profit margins, cash flow, and business diversification are also superior to Marvell's, and even if parts of its semiconductor business experience volatility, infrastructure software revenue can still buffer overall performance.

Therefore, Broadcom is better suited for investors who prioritize earnings certainty, cash flow, and scaled growth in AI infrastructure.

Marvell's advantage lies in its growth flexibility. The company expects revenue in the third fiscal quarter to grow by about 15% sequentially from the second fiscal quarter, with its custom chip business continuing to accelerate over the next several quarters. If projects for Google, Amazon, and other cloud computing customers ramp up smoothly, Marvell's revenue growth rate could pick up further over the next one to two years.

Because Marvell's overall scale is far smaller than Broadcom's, a single large custom chip project could significantly alter its revenue and earnings forecasts. Therefore, Marvell is better suited for investors who are willing to tolerate higher volatility and bet on the rapid expansion of the custom AI chip market.

However, Marvell faces three distinct risks: its stock price has already risen sharply, leaving market expectations high; the main revenue contribution from its Google partnership may take longer to materialize; and a rising share of custom chip revenue could exert some pressure on gross margins.

In contrast, Broadcom's stock price has pulled back about 25% from its June high, and market concerns about Google introducing Marvell have already been reflected in its valuation to some degree. If the upcoming earnings report shows continued strong growth in AI revenue and management further raises future guidance, Broadcom could see a more pronounced valuation recovery.

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