Broadcom and Marvell Technology: A Look at the Potential of Two AI Giants

Broadcom concluded fiscal year 2024 with an impressive organic revenue growth of 9% and achieved a total revenue of $51.6 billion, excluding the VMware acquisition. The coming years promise further double-digit growth, solidly underpinning Broadcom's position in the market for customized AI chips. Marvell Technology has established itself as the second-largest player in the ASIC market, manufacturing customized AI chips for tech giants such as Alphabet, Microsoft, and Amazon. In the third quarter of fiscal year 2025, Marvell increased its data center revenue by 98% to $1.1 billion, compensating for the weak performance of other segments. Overall, revenue grew by 7% year-over-year to $1.52 billion. The outlook for the current quarter is promising: an expected revenue increase of 26% to $1.8 billion and earnings of $0.59 per share illustrate the rapid growth that significantly exceeds initial expectations for the current fiscal year. For the coming year, Marvell forecasts AI revenue of $2.5 billion, which could even be surpassed as Amazon and other partners intensify their collaboration. The secured delivery capacity could additionally accelerate growth. For the next fiscal year, a revenue increase of 41% to $8.11 billion is expected after it increased by 4% to $5.75 billion in the current year. This momentum suggests that net profit will also rise significantly in the coming years. Investors looking for a rapidly growing AI stock might find Marvell appealing, despite a higher valuation level compared to Broadcom. However, Broadcom remains an attractive option due to its strong positioning in the AI sector.