Better AI Chip Stock to Buy Today: Broadcom vs. Marvell
Marvell stock has greatly outperformed Broadcom's this year, but will that continue?
Overview
Broadcom (NASDAQ: AVGO) and Marvell (NASDAQ: MRVL) are leaders in the custom chip and data center networking markets. Both companies are riding the AI infrastructure build-out wave, but of the two stocks, Broadcom clearly stands out as the better AI stock to buy today, in my view.
The tech sector's spending on AI infrastructure is enormous, and it just continues to grow. While cloud computing providers have laid out the strong returns they are getting on their investments, these companies and other hyperscalers (owners of large data centers) are still looking to reduce costs further to get even better returns. In fact, Alphabet has said that for servers built around its own custom AI chips, the period or time it takes for those AI investments to pay back their upfront costs gets cut in half from two years to one. As such, it is not surprising that many hyperscalers are looking to develop their own custom AI chips to help reduce costs.
Details
According to semiconductor industry website Tom's Hardware, custom AI chip shipments are projected to grow nearly 45% this year. While Nvidia's graphics processing units (GPUs) continue to dominate the data center market, custom chips are projected to hit a nearly 28% share in 2026.
Source
Originally published at www.fool.com.