Broadcom and Marvell stocks fall after chip-sector pullback; Broadcom looks cheaper despite slower growth at Marvell.

Marvell Technology surged roughly 32% in a single session after Nvidia CEO Jensen Huang called it a potential trillion-dollar company at an industry event, but gave back much of that gain after a broad chip sector pullback. Broadcom tumbled about 12% on Thursday and slid further on Friday after its latest outlook for AI chip sales came in below expectations.

Broadcom's fiscal second-quarter revenue rose 48% year over year to a record $22.2 billion, with AI semiconductor revenue surging 143% to $10.8 billion (nearly half of total sales). Management guided for fiscal third-quarter AI semiconductor revenue of $16.0 billion, growth of more than 200% year over year. Marvell's fiscal first-quarter revenue grew 28% to a record $2.4 billion, with data center business making up more than three-quarters of the total; management guided for 35% growth in the current quarter and expects fiscal 2027 revenue growth of about 40%.

Broadcom trades at about 64 times earnings, while Marvell trades at roughly 90 times earnings despite growing revenue more slowly. The article concludes Broadcom looks more attractive, as it is growing faster and trades at a more justifiable valuation.