Broadcom (AVGO) Stock Falls 5% After Marvell Lands Google Custom AI Chip Deal
TLDR
- Broadcom fell roughly 5% after Marvell announced a deal to develop custom AI chips for Google, including a warrant worth up to $12.2 billion.
- Broadcom still holds a long-term agreement with Google through 2031 to supply custom AI chips.
- Broadcom’s AI revenue hit $10.8 billion in Q2 FY2026, up 143% year over year.
- Year to date, AVGO is up just 10%, trailing AMD (+126%), MRVL (+155%), and NVDA (+18%).
- VMware security concerns and off-balance-sheet financing worries are adding to selling pressure.
Broadcom (AVGO) opened down roughly 5% on Wednesday to $359.66 after Marvell Technology announced a deal to develop custom AI chips for Google, with Alphabet receiving a warrant to buy up to $12.2 billion worth of Marvell stock.
Marvell jumped more than 11% to $240.26 on the news. Alphabet edged down 0.7% to $341.96. Broadcom closed Tuesday at $380 before the sell-off.
The deal raised fresh questions about how exclusive Broadcom’s relationship with Google really is. Broadcom has been Google’s primary custom chip partner, playing a key role in the design of Google’s Tensor Processing Units.
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