Broadcom Has Seen Its Biggest Customer Drop a Key Chip Before. History Says What the Stock Did Next.
Key PointsBroadcom shares sank on Aug. 19 after Marvell disclosed an expanded custom chip agreement with Google, whose TPU chips Broadcom designs.
Broadcom shares fell on August 19 after Marvell Technology announced an expanded custom chip agreement with Google. The news included a warrant tied to up to $120 billion of future purchases. As a result, Broadcom's shares dropped about 5% that morning.
The decline was attributed to Google, a key customer for Broadcom's custom artificial intelligence (AI) chips, deepening its relationship with Broadcom's direct rival, Marvell. Broadcom designs Google's in-house TPU chips.
This is not the first time Broadcom has faced a situation where a major customer has moved to design its own parts. According to Motley Fool, history may provide insight into how Broadcom's stock will perform next.
Brief written by urgent.news from Nasdaq Markets, Motley Fool — 2 reports on this story. Machine-written — may contain errors; check the original before relying on it.
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