Better Artificial Intelligence (AI) Stock to Buy: Broadcom vs. Marvell Technology

Source Domain: www.fool.com

In the artificial intelligence (AI) world, Nvidia has a dominant market position. Its GPUs are best in class and have powered countless AI workloads, and will continue to do so for some time. However, GPUs have incredible capabilities that aren’t always utilized when deployed in settings where workloads are repetitive and predictable. That’s why some AI hyperscalers are turning to custom AI chips to minimize their run costs.

None of the AI companies can do this on their own, which is why they partner with companies like Marvell Technology (MRVL +7.30%) and Broadcom (AVGO +4.87%). These two companies help their clients design custom AI chips, known as application-specific integrated circuits (ASICs), alongside networking equipment to connect everything together.

That’s a booming business, but which of these two stocks is the better buy? Let’s find out.

Image source: Getty Images.

AI is a new business unit for each company

Both Marvell and Broadcom have other products beyond their AI-focused businesses that get investors excited.

Broadcom offers a wide range of products, including mainframe hardware and software, virtual desktop software, and cybersecurity solutions. Marvell is a bit more focused on the chip side of the industry, and also makes networking chips for mobile devices, controller chips for solid-state drives, and a host of other products.

Today’s Change

(7.30%) $21.13

Current Price

$310.67

Key Data Points

Market Cap

$272B

Day’s Range

$302.39 – $329.85

52wk Range

$61.44 – $329.88

Volume

23.7K

Avg Vol

40.2M

Gross Margin

50.64%

Dividend Yield

0.08%

However, AI is the big focus for both businesses (and for investors). There is a huge market opportunity available, and each is looking to seize it.

The biggest takeaway from their custom AI chip businesses is the customers. Marvell’s primary ASIC customers are Amazon and Microsoft, which use Marvell to help design their Trainium and Maia chips, respectively. Broadcom’s client base includes Alphabet, Meta Platforms, OpenAI,…

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