Marvell Technology vs. Broadcom: Which AI Chip Stock Is Better for Long-Term Holding, MRVL or AVGO?

Custom AI chips mostly utilize application-specific integrated circuits (ASICs) designed specifically for targeted computing tasks. Compared with GPUs, which offer greater versatility and programmability, custom chips can be specifically optimized for matrix operations, data flow, memory access, and chip interconnects.

For large-scale AI training or inference tasks with stable patterns, custom chips offer advantages in computational efficiency, energy consumption, and unit cost. However, they require high R&D investment, and their scope of application and software compatibility are typically inferior to GPUs.

Marvell participates in AI cluster construction through custom compute, data center networking, and optical interconnects. Following its acquisitions of Celestial AI and XConn, the company enhanced its optical interconnect and chiplet connectivity capabilities.

Broadcom covers custom AI accelerators, Ethernet switch chips, and optical communication components, with VMware software revenue reducing the company's reliance on a single semiconductor market.

Marvell's second-quarter fiscal 2027 revenue reached $2.739 billion, up 37% year-over-year; data center revenue grew 46%, GAAP gross margin was 53.1%, and operating cash flow stood at $606 million. The company reported strong AI-related bookings and expects third-quarter revenue of approximately $3.15 billion, plus or minus 5%. Acquisition integration, newly issued shares, and customer purchasing cadence will continue to impact earnings per share.

Broadcom's third-quarter fiscal 2026 revenue rose 86% year-over-year to $29.591 billion. Among this, Semiconductor Solutions revenue reached $20.839 billion, while Infrastructure Software revenue was $8.752 billion; AI semiconductor revenue, driven by custom accelerators and networking products, reached $16.7 billion.

Broadcom's self-defined free cash flow reached $13.665 billion, accounting for 46% of revenue, and the company projects fourth-quarter AI semiconductor revenue of approximately $21.7 billion. The $21.7 billion figure represents management guidance and has not yet materialized into actual revenue.

Marvell ended the period with $3.933 billion in cash and long-term debt of $4.963 billion; its top 10 customers contributed 82% of revenue in fiscal 2026, reflecting high customer concentration. The company's issuance of $2 billion in convertible preferred stock to Nvidia also poses potential dilution.

Broadcom holds $23.975 billion in cash, with the book value of its debt standing at approximately $59.419 billion. Although the debt scale is substantial, its high free cash flow supports debt service and dividend payouts.

As of September 18, 2026, the TTM P/E ratios for MRVL and AVGO were approximately 80.9x and 44.6x, respectively. M&A accounting, preferred stock, and potential dilution all impact GAAP earnings, making this metric suitable only as a supplementary comparison. MRVL needs faster earnings growth to digest its current valuation.

Marvell is smaller in scale. When its custom chip and optical interconnect businesses ramp up, revenue and profit growth may be faster, but investment outcomes depend more heavily on a small number of customers, M&A execution, and financing arrangements.

Broadcom has a larger scale in the custom AI chip and data center networking markets, while software revenue and free cash flow enhance its resilience to volatility. Its primary risks stem from customers adjusting projects, increasing in-house design efforts, VMware integration, and higher debt levels.

Considering business scale, cash flow, revenue mix, and valuation, AVGO is better suited for investors who value operational stability and plan to hold for over three years. MRVL is more appropriate for investors who prioritize growth elasticity, can tolerate higher volatility, and are willing to continuously track customer concentration and M&A progress.

If choosing between the two, Broadcom offers a relatively more balanced risk-reward ratio, but its long-term returns still depend on whether AI order growth can consistently translate into profits and cash flow.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.