Broadcom vs. Marvell: A Valuation Showdown for the Custom AI Chip Trade

Most of the attention in the AI chip boom lands on Nvidia and its graphics processing units. But there's an arguably more interesting corner of the market where two companies are building the chips the biggest tech firms want to design for themselves. Broadcom (NASDAQ: AVGO) and Marvell Technology (NASDAQ: MRVL) are the two names that dominate it, and while they chase the same opportunity, they go about it very differently -- and the market prices them very differently, too.Image source: Getty Images.Before comparing the two, it helps to understand what they do. When a giant cloud company like Alphabet or Meta runs enormous AI workloads, it can either buy general-purpose chips off the shelf or design its own chip tuned precisely to its software. That second path, a custom chip, sometimes called an ASIC or an XPU, can be cheaper to run and more power-efficient at massive scale. The catch is that these companies don't build the chips alone; they lean on a partner with the deep engineering expertise to turn a design into working silicon. Broadcom and Marvell are those partners, and demand for their help has exploded as hyperscalers race to control their own chip destiny rather than depend entirely on Nvidia.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool