Broadcom Shares Drop as Marvell Secures Google Custom Chip Deal
Broadcom (NASDAQ:AVGO) shares fell nearly 5% after Marvell Technology Group secured a $12 billion deal with Alphabet's Google to develop custom AI chips, challenging Broadcom’s exclusive partnership. The move has raised concerns about the exclusivity of Broadcom’s long-term agreement with Google through 2031 and its ability to maintain dominance in the growing AI chip market. Marvell (NASDAQ:MRVL) reported a significant jump in share price following the deal announcement, which includes developing inference accelerators and other technologies for Google. Meanwhile, peers like NVIDIA (NASDAQ:NVDA) and AMD (NASDAQ:AMD) have outperformed Broadcom year to date by large margins despite strong AI revenue growth at Broadcom. Additional concerns include ongoing worries about VMware’s security issues and off-balance-sheet financing practices, which are compounding the selloff. The iShares Semiconductor ETF (SOXX), in which Broadcom is a major component, also declined slightly.
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Topics: AI chips Broadcom stock drop custom silicon deals Marvell-Google partnership