Shares of Broadcom slid after Marvell disclosed on Aug. 19 an expanded custom chip agreement with Google, under which Broadcom designs Google’s in-house TPU chips. The stock fell about 5% that morning, with investors signaling concern about which suppliers are best positioned to win follow-on orders tied to Google’s AI infrastructure roadmap.
However, Broadcom has faced similar “design-away” headlines before. In 2023, Bloomberg reported Apple planned to replace a Broadcom wireless combination chip, yet Broadcom later reported strong growth that was driven largely by AI demand rather than the loss of that specific component.
Key takeaways
- Price move: Broadcom shares fell about 5% on Aug. 19 following Marvell’s expanded Google custom chip disclosure.
- Catalyst: Marvell said its agreement with Google expands custom chip work, including a warrant tied to future purchases, raising questions about supplier positioning in Google’s TPU supply chain.
- Investor implication: The market appeared to focus on whether Google’s evolving AI compute plans could shift Broadcom’s order momentum, not on chip demand broadly.
- Context to watch: Broadcom previously overcame a similar customer redesign risk around Apple’s wireless chip plan, with subsequent revenue growth driven by AI.
What drove the move
Marvell’s Aug. 19 announcement described an expanded custom chip agreement with Google that is tied to Broadcom’s role in designing Google parent Alphabet’s TPU chips. Investors treated the news as a potential read-through on competitive dynamics between suppliers supporting Google’s AI chip ecosystem.
The selling rationale centered on customer concentration within custom AI silicon. Google is described as the most important customer in Marvell’s AI chip business, and because Broadcom designs Google’s TPU chips, market participants interpreted the expanded relationship between Google and Marvell as pressure on Broadcom’s longer-term AI order share.
Breadth within the chip complex was mixed that morning. The article noted that AMD fell about 4%, Nvidia was roughly flat, and Marvell rose about 8%, while the heaviest pressure landed on Broadcom—consistent with investors repricing which vendor wins future customer work rather than simply de-risking the entire sector.
Market reaction and the “Google risk” question
While the headline raised questions, it is important that Marvell’s disclosure was about expansion of work rather than an explicit replacement of Broadcom’s role. Separately, Broadcom announced in April a long-term agreement to develop Google’s future TPU generations and a deal to supply components for Google’s AI racks through as late as 2031. The framing suggests Google may be adding a second silicon partner rather than removing its first.
Even so, the market’s immediate focus was on future order allocation inside the AI franchise. The report said Broadcom’s AI semiconductor revenue reached $10.8 billion in its fiscal second quarter (period ended May 3, 2026), up 143% year over year. Total revenue rose 48% to $22.2 billion, and net income nearly doubled to $9.3 billion. Management guided for $16.0 billion of AI semiconductor revenue in the fiscal third quarter, up more than 200%.
At the same time, the disclosure did not quantify Google’s share of Broadcom’s results. The article stated Broadcom’s top five customers accounted for about 40% of total net revenue in fiscal 2025. That concentration profile matters because a shift in Google-related demand could affect the growth line investors are underwriting for the business—meaning any change would likely show up in quarterly results rather than in a one-day move.
The Apple precedent: why one headline doesn’t settle the story
Broadcom’s stock has been tested by customer redesign concerns before. In January 2023, Bloomberg reported Apple would drop a Broadcom combination chip responsible for handling Wi-Fi and Bluetooth by 2025 and move to an in-house design. At the time, Apple accounted for about 20% of Broadcom’s net revenue, according to the company’s fiscal 2023 annual filing, and the article estimated roughly $7 billion per year at that level.
Ultimately, the transition took time. Apple introduced its own N1 wireless chip in the iPhone 17 lineup in September 2025, nearly three years after the report. But the period between the headline and the product cycle outcome included other revenue support: Broadcom announced a multiyear, multibillion-dollar agreement in which it would continue to build 5G radio-frequency components, including filters, in the U.S. The article also said Broadcom disclosed an agreement extending that chip supply relationship through 2031.
More broadly, Broadcom’s revenue nearly doubled from $35.8 billion in fiscal 2023 to $63.9 billion in fiscal 2025, as AI demand overwhelmed other segments. In other words, even if a specific customer shift affects a product line, the company’s broader mix—particularly AI—can change the impact on financial outcomes.
Bigger picture: AI supply chains are competitive, but change is gradual
The comparison to Apple is relevant because it illustrates how quickly “design-away” risks can appear in the market and how slowly those risks ultimately translate into earnings. The article notes that the Google-Marvell agreement includes a vesting schedule extending to January 2033 and describes chip programs designed to plug into Google’s TPU ecosystem, which implies integration work rather than a complete teardown of existing supply relationships.
Still, the parallel is not perfect. Wireless components addressed a comparatively mature portion of Broadcom’s business, while AI custom chips are at the core of the growth that investors have been paying for. In that sense, the direction and magnitude of any Google-related order shift could have more direct implications for near-term growth rates than a change in a narrower component category.
What to watch next
Investors likely will look for follow-through in Broadcom’s AI segment results on upcoming earnings reports and guidance updates, focusing on whether AI semiconductor revenue trajectory holds as customer ecosystems evolve. With AI infrastructure demand driving the company’s recent performance, the next earnings cycle is the clearest forum for management to quantify how expanded partner relationships across Google’s AI chip stack translate into orders and revenue over time.
