Marvell Technology or Broadcom: Which Custom AI Chip Stock Offers Greater Potential for Growth?

The Shift from GPUs to Custom AI Chips

For the past several years, graphics processing units (GPUs) have been the preferred hardware for major cloud providers and artificial intelligence firms. Their ability to handle thousands of calculations at once makes them well-suited for the intense computational demands of AI training and inference.

Recently, however, GPUs are being challenged by application-specific integrated circuits (ASICs), also known as custom processors. Unlike the general-purpose design of GPUs, ASICs are engineered for particular tasks, resulting in higher efficiency and performance. Reports indicate that ASICs can deliver 30% to 40% better energy efficiency compared to GPUs, while also outperforming them in speed for targeted applications.

Given their advantages, custom AI chips are becoming the preferred choice for AI inference tasks, which don’t require the same level of processing power as model training. According to TrendForce, ASIC sales are projected to surge by 45% in 2026, far outpacing the expected 16% growth in GPU shipments.

Investors interested in this rapidly expanding segment of AI hardware may want to consider Broadcom (NASDAQ: AVGO) and Marvell Technology (NASDAQ: MRVL), two leading ASIC manufacturers. But which of these semiconductor stocks offers the best opportunity right now?

Image source: Getty Images.

Broadcom and Marvell: Riding the Custom AI Chip Wave

Both Broadcom and Marvell have reported impressive growth, fueled by the increasing demand for custom AI chips in data centers. Marvell’s most recent quarterly results showed a 22% year-over-year revenue increase to $2.22 billion for its fiscal fourth quarter of 2026, with adjusted earnings climbing 33% to $0.80 per share.

Marvell’s data center division has benefited significantly from strong sales of its networking hardware and custom processors. The company noted that revenue from custom processors doubled over the past fiscal year, and it expects revenue from networking switches to double in fiscal 2027.

With data center products making up 74% of Marvell’s revenue last quarter, the company has raised its full-year revenue forecast to $11 billion—up from a previous estimate of $9.5 billion—as it prepares to ramp up production of several new custom AI chip projects this year.

Looking ahead, Marvell anticipates robust growth in its custom AI segment, aiming to deliver more than 20 different chip types to customers in the coming years. This outlook supports its ambitious target of $15 billion in revenue for fiscal 2028, reflecting continued momentum.

Analysts are optimistic about Marvell’s earnings potential, given these strong growth projections.

Broadcom’s Market Leadership and Growth Prospects

Broadcom’s latest quarterly report (fiscal Q1 2026) also revealed strong performance, with revenue up 29% year-over-year and adjusted earnings per share rising to $2.05. The company’s growth rate closely matched Marvell’s last quarter.

However, Broadcom is poised to take the lead, as it holds the top position in the custom AI processor market. Counterpoint Research forecasts that Broadcom will control 60% of this market by 2027.

This dominant market share is driving Broadcom’s AI revenue growth, which soared 106% year-over-year to $8.4 billion in the previous quarter. In comparison, Marvell’s data center business grew 21% over the same period. Broadcom expects its AI revenue to accelerate further, projecting $10.7 billion in the current quarter—a 143% increase from the previous year’s quarter. For context, Broadcom’s AI revenue grew 46% in the same quarter last year.

Broadcom’s strong position in the custom chip space underpins its confidence in reaching at least $100 billion in AI revenue by fiscal 2027. The company has already secured the necessary supply chain to achieve this goal, positioning it to serve major clients such as Anthropic, Meta Platforms, Alphabet (Google), and OpenAI.

Like Marvell, Broadcom is expected to deliver substantial earnings growth as the AI chip market expands.

Which Stock Is the Better Buy?

Both Marvell and Broadcom are well-positioned to benefit from the ongoing expansion of the custom AI chip market, making either stock a compelling choice for investors. However, those seeking value may find Marvell more attractive, as it currently trades at a lower valuation. This could provide greater upside if the market rewards Marvell with a higher valuation in the future.

On the other hand, Broadcom’s higher valuation is supported by its commanding market share and rapid growth in AI revenue. Investors willing to pay a premium for a market leader in custom AI chips may prefer Broadcom, despite its higher price relative to Marvell.

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