Broadcom's Shares Tumble Amid Google-Marvell Partnership Expansion

Broadcom's (AVGO) shares have taken a hit as investors weigh in on Google's expanded partnership with Marvell Technology (MRVL) and the performance of OpenAI's custom chip project. The Jalapeno inference processor, developed by OpenAI, delivered a significant boost in AI work per watt compared to rival systems, potentially offering Broadcom an alternative growth driver for its custom silicon business.

The project highlights the growing trend among cloud companies to diversify their suppliers and develop more efficient AI processors. Marvell's shares surged nearly 8% after Google expanded cooperation on custom AI processors and networking products, a deal that could generate up to $120 billion in revenue by fiscal year 2033 if purchase targets are met.

Broadcom has already made significant strides in the AI semiconductor market, with revenue reaching $10.8 billion in its second fiscal quarter, a 143% increase from the same period last year. The company's management expects this trend to continue, forecasting around $16 billion in revenue for the current quarter.