Broadcom Stock Falls After Marvell Announces AI Deal with Google
Shares of Broadcom (NASDAQ: AVGO) dropped nearly 5% on Wednesday after Marvell Technology Group announced a significant partnership with Alphabet, which is also one of Broadcom's largest customers. The deal involves Marvell developing custom semiconductors for artificial intelligence and related components. Investors feared the agreement might reduce Broadcom’s business opportunities with Google, despite an existing five-year AI chip contract between Broadcom and Alphabet signed earlier in 2026. However, analysts suggest that this concern may be overblown given the vast scale of the overall AI market opportunity for semiconductor companies like Broadcom. Broadcom CEO Hock Tan has previously stated the company is on track to generate more than $100 billion annually from AI chips alone by 2027. Despite its current valuation, which stands at around 31 times forward earnings, investors are reacting negatively in the short term due to fears of lost business with Alphabet.
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