Broadcom's AI semiconductor revenue jumped 221% year-over-year in fiscal Q3 2026, while Marvell Technology expanded its custom-chip partnership with Google. Broadcom trades at a fraction of Marvell's valuation despite guiding to comparable or faster growth, appearing to offer the better risk-reward setup between the two AI chipmakers.
Broadcom's AI semiconductor revenue surged 221% year-over-year to $16.7 billion in the third quarter of fiscal 2026, ended August 2. Marvell Technology, meanwhile, drew nearly 79% of its revenue from the data center segment in its second quarter of fiscal 2027, ended August 1, 2026, as AI-related demand strengthened both companies' businesses.
Google widens its custom-chip supplier base
Marvell recently expanded its partnership with Alphabet's Google to develop custom silicon tied to Google's TPU ecosystem, chips that help Google run AI models, move data, and manage memory. Google can buy up to roughly 59 million Marvell shares at $206.58 each, though most of the warrants vest only as Marvell's revenue from the partnership grows. Broadcom, however, also holds a long-term agreement to supply chips for future Google TPU generations, plus networking components for Google's next-generation AI racks through as late as 2031 — suggesting Google is broadening its supplier base rather than shifting away from Broadcom.
Broadcom's AI business keeps scaling
Broadcom expects its AI semiconductor revenue to reach about $21.7 billion in the fourth quarter of fiscal 2026, up 236% year-over-year, and around $58 billion for the full fiscal year. Management projects AI semiconductor revenue near $115 billion in fiscal 2027 and around $230 billion in fiscal 2028. The company generated $13.7 billion in free cash flow in the third quarter, nearly 46% of revenue, and its infrastructure software business added about $8.8 billion.
Marvell raises its own growth targets
Marvell now expects fiscal 2027 revenue to grow 45% year-over-year to $12 billion, up from its earlier guidance of $11.5 billion, and fiscal 2028 revenue to rise about 50% to $18 billion, versus a prior outlook of $16.5 billion. Its data center segment is projected to grow about 60% in fiscal 2027 and more than 60% in fiscal 2028, with custom chips expected to more than double in fiscal 2028 and connectivity solutions driving most of a $1.5 billion increase in that outlook.
The valuation gap favors Broadcom
Analysts expect Broadcom's fiscal 2027 revenue to reach about $173.5 billion, up nearly 64% year-over-year, against Marvell's projected $18.2 billion in fiscal 2028, up about 51%. Yet Broadcom trades at only about 21.6 times estimated fiscal 2027 earnings and 14.2 times expected EBITDA, compared with roughly 57.3 times earnings and 30.2 times EBITDA for Marvell. Investors are paying a much steeper valuation for Marvell even though its growth outlook isn't higher.
Marvell could still outperform if its custom-chip and connectivity businesses beat expectations, but Broadcom does not need the same execution to justify its price.
Source: The Motley Fool
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