Broadcom Loses Ground Amid Marvell-Google Chip Partnership
Broadcom shares took a hit on Wednesday after Marvell Technology landed a deal to help develop custom AI chips for Google. The news put pressure on Broadcom's status as Google's incumbent custom silicon partner, with the company's stock down 5% to $359.66 in early trading.
Marvell's stock jumped more than 11% in response, with the company issuing a warrant to buy a stake worth about $12.18 billion tied to the deal. The agreement covers the development of AI inference accelerators, storage, networking and memory interface controllers, and near-memory computing technologies for Google.
The pressure on Broadcom's stock is not new, however. Despite a strong year for AI infrastructure names, Broadcom shares have lagged behind its peers, gaining only 10% year to date through Tuesday's close compared to gains of 155% or more for Marvell and other chip makers.
VMware and financing concerns are also weighing on Broadcom sentiment, with traders split on whether the pullback is an overreaction to market noise or a structural re-rating. The company's off-balance-sheet financing vehicles and reported VMware security concerns have contributed to selling pressure.