Is Broadcom in Trouble Now That Alphabet Is Getting Chips From Marvell Too?
2026-08-25 11:15
•Marc Guberti •The Motley Fool
••••• ••••••••• Axe Cap view
Broadcom's AI Chip Lead Remains Intact Despite Alphabet’s Marvell Play
Alphabet broadening chip suppliers is smart risk management, not a Broadcom dethroning.
Broadcom’s recent 10% share dip after Alphabet expanded its deal with Marvell looks more like an overreaction than a sign of trouble. Broadcom dominates the custom AI chip market with a 143% revenue jump year-over-year, and management forecasts a tripling of that revenue soon. Alphabet diversifying its chipmakers mirrors established tech players like Meta using multiple GPU suppliers; it’s about supply security and flexibility, not cutting Broadcom out. Local investors should watch this indirectly through USD/ZAR — Broadcom’s strength ties into global AI growth, which could support rand resilience. Yet, if Alphabet’s shift to Marvell accelerates faster than expected, chip demand and margins for Broadcom might take a hit. For now, Broadcom stands firm as the ASIC king, but keep an eye on execution and emerging competition. this is just our opinion and not financial advice
We’d watch USD/ZAR for tech-driven rand strength but lean towards trimming broad rand-exposed tech beta on any optimism spike. For direct SA equities, avoid tech proxies like Naspers or Prosus until a clearer signal emerges.
- USD/ZAR
- Prosus
- Alphabet shifts more orders rapidly to Marvell
- Global AI chip demand cools unexpectedly
6/10
Broadcom's stock dropped over 10% after Alphabet announced an expanded partnership with Marvell Technologies for custom AI chips. However, the article argues this shouldn't concern investors, as Broadcom remains the dominant leader in custom AI chip design (ASICs) with strong fundamentals. Alphabet's diversification with Marvell mirrors how Meta works with multiple GPU suppliers, and doesn't necessarily mean reduced Broadcom orders. Broadcom's AI segment showed 143% year-over-year revenue growth and management expects it to more than triple in the next quarter.
Our take is based on reporting first published by The Motley Fool.