Full Breakdown
AI Chip Makers Marvell and Broadcom Experience Sharp Sell-Off Amid Diverging Valuations
6/8/2026, 1:11:27 PM
Sharp Sell-Off Hits AI Chip Makers Marvell and Broadcom
Marvell Technology (MRVL) dropped 15.74% to $266.63 and Broadcom (AVGO) fell 7.49% on Thursday, extending losses on Friday after AI-chip sales outlooks missed market expectations during the week of June 7, 2026.
AI Build-Out Drives Custom Silicon Demand
The AI build-out has driven demand for silicon and networking chips that power data-center workloads. Marvell and Broadcom supply AI accelerators and connectivity solutions to a small group of hyperscale cloud operators, making them pivotal to sector growth.
CEOs Highlight Growth and Momentum
Marvell CEO Matt Murphy said bookings are “exceptional” and lifted revenue outlook. Broadcom CEO Hock Tan noted momentum and target of over $100 billion in semiconductor revenue for fiscal 2027. Nvidia CEO Jensen Huang called Marvell a trillion-dollar company.
Revenue, Growth Rates, and Valuation Metrics
Marvell posted Q1 2027 revenue of $2.4 billion, a 28% YoY rise, with data-center sales making up three-quarters of total. It now expects 40% FY2027 growth and trades at a 90× earnings multiple. Broadcom reported Q2 2026 revenue of $22.2 billion, up 48% YoY, driven by AI semiconductor sales that jumped 143% to $10.8 billion—about half of revenue. Non-GAAP EPS rose 54%, cash flow hit $10.3 billion (46% of revenue), and trades a 64× earnings multiple.
Management Guidance and Outlook
Marvell’s management said the surge in AI bookings justifies an upward revision of its FY2027-28 revenue outlook and guided 35% quarterly growth. Broadcom’s leadership reaffirmed AI momentum, forecasting $16 billion in AI semiconductor revenue for quarter—a rise of 200% YoY—and reiterated a FY2027 target exceeding $100 billion.
Analyst Concerns Over Valuation and Customer Concentration
The analysis notes Marvell’s 90× earnings multiple far above Broadcom’s 64×, suggesting over-priced growth expectations. Marvell’s slower revenue and reliance on few hyperscale customers raise resilience concerns if a program falters, while Broadcom’s scale, diversified portfolio, and strong free cash flow mitigate concerns.
Verbatim Quotes
“We are seeing exceptional AI-related bookings, and as a result, we are significantly raising Marvell's revenue outlook for both fiscal 2027 and fiscal 2028 compared with the guidance we provided last quarter,” — Matt Murphy, CEO, Marvell Technology
“We expect this momentum to continue into fiscal year 2027 and reiterate our AI semiconductor revenue guidance to be in excess of $100 billion,” — Hock Tan, CEO, Broadcom
Valuation Divergence and Uncertainty
Sources differ on valuations: Marvell’s price rise and multiple imply optimism, while Broadcom’s lower multiple and cash flow suggest a justified price. No conflict exists on financial figures, but uncertainty remains about AI-chip demand durability beyond the build-out.
Outlook and Investor Considerations
The outlooks depend on AI spending. Marvell targets 35% growth and a 40% FY2027 increase; Broadcom aims for AI semiconductor revenue above $100 billion in FY2027 and $16 billion in quarter. Analysts warn any slowdown could trigger price corrections, making earnings and cash-flow reports critical for investors.
