Qualcomm's AI Chip Transformation Leaves Marvell in the Dust

Qualcomm and Marvell Technology are two underdog companies vying for dominance in the artificial intelligence (AI) chip market. Qualcomm, in particular, is undergoing a significant transformation from a smartphone supplier to a long-term partner for major cloud and social platforms like Meta Platforms.

The company's new Dragonfly platform includes a server CPU called Dragonfly C1000 and an AI accelerator called AI300, designed to power future data centers at companies such as Meta. Qualcomm has also signed a multi-generation agreement with Amazon to supply CPUs for its next wave of servers, with production set to start in the second half of 2028.

Moreover, Qualcomm and Amazon have announced a multi-generation collaboration to co-develop custom chips for Amazon Web Services data centers, focused on running AI services more cheaply and efficiently. This partnership includes warrants that allow an Amazon entity to buy up to 25 million shares over time, tied to as much as $60 billion in potential chip purchases.

Qualcomm's pivot towards a platform spanning from data centers to personal devices is consistent and impressive, with the company describing data center components designed to reduce power use per unit of work, on-device chips for laptops and phones that keep more AI processing local, and edge processors for robots and connected machines.

In contrast, Marvell Technology has already had its run, with investors already aware of the AI story. Much of its future growth is tied to strong AI demand and winning major customer designs. Marvell's stock price has jumped nearly 250% in the last calendar year, leaving less room for it to run this cycle.