Marvell just pulled a piece of Google's custom AI chip business away from Broadcom, and in the span of three trading days Wall Street couldn't decide whether that was a win worth celebrating.
On August 19, Marvell Technology disclosed an expanded custom silicon partnership with Alphabet's Google, covering AI inference accelerators, storage, networking, memory interface controllers and near-memory computing technology. As part of the deal, Marvell granted Google a warrant to buy up to 58.97 million Marvell shares at a strike price of $206.58, a stake worth roughly $12.2 billion. The market loved it. Marvell stock jumped as much as 13% that day and closed up nearly 10%, at $237.27. Broadcom didn't fare as well. It has supplied Google's tensor processing units for the better part of a decade, and it fell as much as 5% that day, closing down 4.61% and erasing about $87 billion in market value in a single session.
That's the headline. Here's the part that matters more.
Why Broadcom isn't done #
Broadcom isn't out. It signed an expanded, long-term agreement with Google in April that runs through 2031, and Google's total custom-chip spending keeps climbing regardless of who gets the incremental dollars. What spooked investors wasn't a canceled contract. It was the signal that Google no longer wants one supplier calling all the shots. Macquarie analyst Arthur Lai cut his Broadcom price target and projected the company's share of Google's custom chip revenue would slide from roughly 95% in 2026 to about 65% by 2028, according to a note covered by TipRanks. Broadcom hasn't lost Google as a customer: it's lost its grip on the account.
Two days later, the story flipped again. Marvell fell about 6% on August 21, closing at $235.20, as investors turned their attention to the dilution baked into the warrant. Google's strike price of $206.58 sits below Marvell's post-deal trading range, so every dollar the partnership generates for Marvell also converts more of Google's warrant into equity, at Marvell shareholders' expense. Broadcom, meanwhile, ticked up 1.3% to $368.88 after BMO Capital Markets initiated coverage with an outperform rating and a $455 price target.
Anthropic makes AI chips Wall Street's newest collateral Apollo and Blackstone's $35 billion financing for Anthropic shows how private credit is moving into the center of the AI infrastructure race. Broadcom's residual value support could turn custom chips into a repeatable asset-backed finance model. - how Anthropic finances AI chip infrastructure costs - Wall Street structured credit for AI compute capacity
The valuation gap #
It explains why the market punished one stock and shrugged off the other. Broadcom trades at roughly 20 times forward earnings. Marvell trades at around 58 times. Marvell shares were already up 196% year to date through that Thursday's close, meaning the stock had priced in a lot of good news before the Google warrant even showed up in a filing. A company trading at that multiple has far less room for a dilution surprise than one trading at a third of it.
None of this scared off the analysts covering Marvell directly. Roth Capital raised its price target to $350 from $275 and kept a buy rating; UBS lifted its target to $310 from $300, and Jefferies held its buy rating too, with a $325 target. Three banks, three numbers, one direction. The disagreement isn't about whether Marvell's Google business is real - it's about how much of the upside investors have already paid for.
If you own either stock, or you're watching this space to understand where AI infrastructure spending actually flows, the lesson isn't which company "won." It's that Google, like Microsoft, Amazon and Meta before it, is actively building redundancy into its chip supply chain. Custom silicon deals that once looked like exclusive, decade-long marriages are turning into multi-vendor arrangements where suppliers compete for share every budget cycle. Broadcom found that out the hard way this month, and Marvell found out just as fast that winning a piece of the pie doesn't guarantee the market rewards you for keeping it. Frankly, the whiplash in both stocks over four trading days says more about how jumpy AI-chip investors have become than it does about either company's fundamentals. Google's total spending with both suppliers is still rising. The fight is over the split, and that fight isn't finished.
Also read: Shein Prices Hong Kong IPO at Up to $27 Billion, Down 70% From Peak • Trump Team Sent $6.2 Million in Tokens to OKX Before Price Crashed 33% • Silver Doubles in 2026 as Solar Makers Cut It Out and Retail Buyers Pile In