Custom AI accelerator chips are driving historic growth at both semiconductor giants, with Broadcom's AI revenue surging 143% year-over-year.
Broadcom and Marvell Technology are posting record-breaking revenue figures off the back of surging demand for custom AI accelerators and networking hardware, the kind of specialized silicon that powers the world’s largest data centers.
Broadcom’s fiscal Q2 2026 results tell a particularly striking story: total revenue hit $22.2 billion, a 48% jump year-over-year. The AI semiconductor segment alone accounted for $10.8 billion of that figure, up 143% from the same period a year earlier.
Custom silicon is eating the GPU’s lunch
Broadcom is the dominant player in this custom accelerator space, commanding over 70% market share. The company isn’t slowing down either. Broadcom is projecting $16 billion in AI semiconductor revenue for fiscal Q3 2026. Looking further out, the company has set a long-term target of exceeding $100 billion in cumulative AI chip sales through the end of the decade.
Marvell posted full-year fiscal 2026 revenue of $8.195 billion, a 42% increase year-over-year and a company record. CEO Matt Murphy attributed the growth largely to data center initiatives and strategic partnerships. The company is targeting its custom chip business to surpass $10 billion in annual revenue by 2029. Reports have indicated that Marvell has been in discussions with Google about developing next-generation AI chips.
Why custom beats general purpose
Broadcom’s client roster, which includes Alphabet, Meta, and OpenAI, reads like a who’s-who of AI spending. These companies work closely with Broadcom and Marvell to co-design silicon tailored to specific model architectures and deployment environments.
What this means for investors
Broadcom recently revised its AI revenue outlook slightly downward, which sent its stock price lower. This tension between extraordinary growth and sky-high expectations is the central challenge for investors evaluating these stocks. A 143% year-over-year increase in AI revenue is remarkable by any historical standard, but when the market has already priced in aggressive growth, even a modest downward revision becomes a sell signal.
Broadcom’s 70%-plus market share in custom AI accelerators gives it an enormous incumbent advantage, but Marvell’s aggressive pursuit of design wins and partnerships, particularly with Google, suggests the market is large enough for a strong second player. Marvell’s $10 billion annual custom chip revenue target for 2029 and Broadcom’s $100 billion cumulative sales goal both imply that these companies see the current growth trajectory extending well into the second half of the decade.
Investors should watch for updates on Marvell’s Google partnership and Broadcom’s Q3 results as the next critical data points in determining whether these ambitious targets are on track.
