Broadcom Loses $87 Billion as Google Gives Marvell Bigger AI Chip Role

Broadcom shares fell nearly 5% on Wednesday after Google expanded its custom-silicon partnership with Marvell Technology, raising concerns that Broadcom could face greater competition for the technology giant’s future artificial intelligence chip spending.

AVGO traded at approximately $361.45 as of 9:53 a.m. ET, down 4.84% from Tuesday’s $379.83 close. Based on Broadcom’s approximately 4.76 billion outstanding shares, the decline erased an estimated $87.5 billion from its market capitalization.

Broadcom’s implied market value fell from roughly $1.81 trillion to approximately $1.72 trillion. These estimates will change as the stock moves during the session.

Meanwhile, Marvell shares climbed approximately 8% after gaining more than 11% in premarket trading.

Why Is Broadcom Stock Down Today?

The market is reacting to Google’s decision to give Marvell a substantially larger role across its custom AI infrastructure.

According to Marvell’s regulatory filing, the expanded partnership covers multiple semiconductor programs connected to Google’s Tensor Processing Unit ecosystem, including:

• AI inference accelerators
• Storage controllers
• Network interface controllers
• Memory interface controllers
• Near-memory computing technology

This is broader than an isolated chip-design contract. It positions Marvell across several components responsible for processing, storing and transferring data inside Google’s AI infrastructure.

Google appears to be building a multi-supplier custom-chip ecosystem rather than depending primarily on one semiconductor partner. That could reduce Broadcom’s share of future orders and give Google greater leverage when negotiating prices and contract terms.

The broader US market was trading higher Wednesday, making Broadcom’s decline appear primarily company-specific rather than part of another widespread technology selloff.

Google’s Warrant Is Tied to $120 Billion in Purchases

Marvell issued Google a warrant to purchase as many as 58,970,907 shares at an exercise price of $206.58 each.

Exercising the entire warrant for cash would cost Google approximately $12.18 billion. However, that figure should not be described as the guaranteed value of Google’s potential stake. The shares’ actual market value would depend on Marvell’s stock price when the warrant is exercised.

Google also does not immediately receive the right to purchase all 58.97 million shares.

Approximately 1.36 million shares are subject to time based vesting during the first year. Most of the remaining warrant shares vest only when Google meets specified purchasing thresholds through Marvell’s fiscal 2033.

The performance-based portion is divided into 240 tranches, with each tranche linked to $500 million in qualifying custom product revenue. Consequently, fully vesting every performance tranche could require as much as $120 billion in cumulative purchases from Marvell.

That purchasing framework is more significant than the headline warrant value. It gives Marvell a potential path to capture a meaningful portion of Google’s long-term AI hardware budget rather than simply participating in a limited development project.

Reuters reported that a fully exercised warrant could make Google one of Marvell’s five largest shareholders.

Google Has Not Abandoned Broadcom

Wednesday’s decline does not mean Broadcom has lost Google as a customer.

Broadcom signed a separate long-term agreement in April to develop and supply future generations of Google’s custom AI processors and other components for next-generation AI racks through 2031. That agreement remains in place.

The immediate risk is therefore not the cancellation of Broadcom’s existing business. It is the possibility that Marvell captures a larger portion of Google’s future spending and weakens Broadcom’s pricing power.

Broadcom also has major custom silicon relationships outside Google.

Its expanded partnership with Meta covers several generations of Meta Training and Inference Accelerator chips through 2029, beginning with more than one gigawatt of computing capacity.

Broadcom is also working with OpenAI to develop and deploy 10 gigawatts of OpenAI-designed AI accelerators. Deployment is expected to begin during the second half of 2026 and continue through 2029.

These agreements reduce Broadcom’s dependence on any single customer, although Google remains strategically important to its custom-chip business.

Broadcom Stock Is Down Over the Past 90 Days

Wednesday’s decline extends Broadcom’s net loss over the past 90 calendar days.

AVGO closed at $414.57 on May 21. Compared with Wednesday’s early price of $361.45, the stock has declined approximately 12.8% over that period.

The performance has not been a continuous decline. Broadcom reached a record intraday high of $495 on June 3 before falling sharply following its quarterly results. The stock later recovered above $427 in early August before turning lower again.

AVGO is now approximately 27% below its June record. Historical prices therefore confirm a negative 90-day return, but the stock’s path has included several substantial rebounds rather than a consistent straight-line downtrend.

Broadcom Tokenized Stock Follows AVGO Lower

Broadcom Tokenized bStock, trading under AVGOB, followed the Nasdaq-listed shares lower.

At the time of reporting, CoinMarketCap showed AVGOB near $370.86, down approximately 3.66% over 24 hours. Reported trading volume reached about $1.54 million.

AVGOB provides tokenized economic exposure to Broadcom but is not identical to holding AVGO through a conventional brokerage account. Its price can temporarily differ from the underlying shares because of extended trading hours, liquidity, spreads and price-feed timing.

The token’s approximately $1.9 million market capitalization represents only the value of circulating AVGOB tokens. It should not be confused with Broadcom’s corporate market value of approximately $1.72 trillion.

What This Means for Broadcom Stock

Broadcom’s selloff reflects a reassessment of its competitive advantage in custom AI chips—not evidence that Google has terminated their existing relationship.

Marvell’s expanded role shows that Google wants additional suppliers, broader technical capabilities and potentially greater negotiating leverage as its AI infrastructure spending accelerates. That creates a genuine long-term competitive risk for Broadcom.

However, Broadcom remains connected to Google through 2031 and maintains substantial AI agreements with OpenAI, Meta and other customers.

The central question is not whether Broadcom will remain part of the AI infrastructure boom. It is how much of the expanding custom chip market the company can retain as Marvell becomes a stronger competitor.