What is a custom AI chip?

Custom AI chips, also called ASICs (application-specific integrated circuits), are designed around a specific workload, offering better performance and cost-efficiency than GPUs for AI tasks. They are used by AI hyperscalers and firms like OpenAI and Anthropic.

Which companies use Broadcom and Marvell for custom AI chips?

Broadcom's clients include Alphabet, Meta, OpenAI, and Anthropic, while Marvell's clients are Amazon and Microsoft.

AI Stocks & MarketsAI Business & IndustryYahoo Finance AIAug 23, 2026Aug 24, 2026, 04:01 JST1 min read

Broadcom vs Marvell: 1 metric picks cheaper AI chip stock

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Key takeaway

Broadcom looks cheaper and faster-growing than Marvell in custom AI chips.
It trades at about half Marvell's forward price.
Analysts see 64% growth for Broadcom versus 45% for Marvell.

3 Key Points

What happened
Broadcom and Marvell both make custom AI chips for hyperscalers, but Broadcom is trading at about half the price of Marvell based on next year's earnings projections. Analysts expect 64% revenue growth for Broadcom in fiscal 2027, versus 45% for Marvell's next fiscal year.
Why it matters
Broadcom has a larger client list (Alphabet, Meta, OpenAI, Anthropic) and is expected to grow faster, making it the more attractive investment. Marvell's clients include Amazon and Microsoft, but the article suggests Broadcom's lower valuation and growth make it the better buy.
What to watch
Custom AI chips could keep gaining popularity beyond 2027 as they prove more cost-effective than GPUs—Amazon's Trainium is about 30% to 40% more cost-effective than GPU-based training, depending on the generation compared.

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Context & Analysis

The custom AI chip market is growing because these chips can be more cost-effective than GPUs for specific workloads, especially as AI training scales. Broadcom and Marvell are key partners for hyperscalers lacking chip design expertise, but the article argues Broadcom offers a better value: it is cheaper on a forward earnings basis and expected to grow faster. Amazon's Trainium chip's 30% to 40% cost advantage over GPUs suggests demand could persist beyond 2027, potentially benefiting both companies. However, the article's author holds positions in both, so readers may weigh that when considering the bullish outlook on Broadcom.

FAQ

What is a custom AI chip?: Custom AI chips, also called ASICs (application-specific integrated circuits), are designed around a specific workload, offering better performance and cost-efficiency than GPUs for AI tasks. They are used by AI hyperscalers and firms like OpenAI and Anthropic.
Which companies use Broadcom and Marvell for custom AI chips?: Broadcom's clients include Alphabet, Meta, OpenAI, and Anthropic, while Marvell's clients are Amazon and Microsoft.

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