Marvell: Google Chip Report Aligns with Our Bullish XPU Growth Thesis, Now Recognized in the Market

Key Morningstar Metrics for Marvell Technology

• Fair Value Estimate
  : $130.00
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : High

The Information reported that Marvell Technology MRVL is working on two custom AI chips for Google. One chip is a memory processor designed to work alongside Google’s TPU, and one is an artificial intelligence compute chip, potentially an alternative to the TPU. Marvell shares rose 5% intraday on April 20.

Why it matters: Marvell’s custom chip pipeline is growing, and we see this as a primary driver of results going forward. At the same time, we don’t see this as bearish for Broadcom AVGO, which designs Google’s TPU. We see these chips as complements in a multisourced AI infrastructure environment.

• Google would add another blue-chip customer to Marvell’s custom chip business, which already services Amazon’s AMZN AWS and Microsoft MSFT. We believe the market has now come around to our optimism on Marvell’s strong position for this opportunity.
• Broadcom faces competition for Google’s business from MediaTek and now Marvell, but we don’t see these as materially affecting its growth. We project Broadcom to keep 90% of Google’s TPU supply, and we already expected some incremental share for MediaTek as a second source.

The bottom line: We maintain our $130 fair value estimate for narrow-moat Marvell and our $500 fair value estimate for wide-moat Broadcom. The announcement fits with our XPU growth thesis on both names. Marvell looks fairly valued to us, while we continue to view Broadcom as one of our top picks.

• Marvell shares have risen 70% in the year to date, with strong market reactions to a $2 billion investment from Nvidia NVDA and the Google chip news. We now see the market aligned with our bullish growth thesis.
• Broadcom still looks undervalued to us. We see the firm as the undisputed market share leader in custom AI compute chips and expect a strong positive catalyst when Anthropic revenue begins ramping later in 2026.