SAN FRANCISCO, July 12, 2026, 07:10 PDT
Broadcom Inc. NASDAQ:AVGO closed Friday at $399.97, up 11% from July 2. Apple Inc. NASDAQ:AAPL revealed a five-year U.S. chip deal with Broadcom that is expected to top $30 billion. Broadcom’s market cap increased by about $188 billion this holiday-shortened week, based on the company’s latest share count.
The gain was about 6.3 times the contract’s stated value. If spread out, it would come to $6 billion a year on average, but recognized revenue could fall in different periods. How the stock jumped points to investors seeing Apple’s order as a sign Broadcom’s custom-chip business has broader traction, not just as one supply contract’s value.
Marvell Technology Inc. NASDAQ:MRVL, which competes with Broadcom in custom chips and data center gear, fell the other direction. Shares dropped 3.0% Friday to close at $235.81, leaving them down 3.9% for the week. Using its most recent share count, about $8.3 billion was wiped out, pushing the weekly equity-value gap with Broadcom to around $196 billion.
| Holiday-shortened week | Broadcom | Marvell |
|---|---|---|
| July 2 close | $360.45 | $245.29 |
| July 10 close | $399.97 | $235.81 |
| Weekly change | up 11.0% | down 3.9% |
| Approx. equity-value change | gained $188.0 billion | lost $8.3 billion |
Equity value changes use the most recent reported share counts from companies and are rounded.
Apple said the deal will lead to over 15 billion chips being made and designed in the U.S., including custom silicon, radio-frequency chips, and wireless-connectivity parts. Broadcom is putting $1.5 billion into its Fort Collins, Colorado, site. CEO Hock Tan said Broadcom is “pleased to expand our manufacturing footprint in Fort Collins.” Custom chips in Broadcom’s AI unit are often known as application-specific integrated circuits, or ASICs, which are built for specific customers or tasks. Apple
CNBC’s Jim Cramer called the Apple contract “larger than we thought” and said Broadcom “is going to come back.” Most of that recovery was seen by Friday’s close. The question now is what kind of revenue and margins can actually support a market cap close to $1.9 trillion. Insider Monkey
At Friday’s close, based on trailing revenue from Trefis and gross margin figures from the Broadcom-Marvell comparison, Broadcom and Marvell are both around 24 to 25 times sales. Trefis says Broadcom’s current price bakes in a need for about 24% compound annual growth in revenue for five years under its base case. If that growth comes in just three years, the needed rate jumps to 44%.
| Valuation measure | Broadcom | Marvell |
|---|---|---|
| Approx. market value | $1.90 trillion | $206.3 billion |
| Last-12-month revenue | $75.5 billion | $8.72 billion |
| Market value / revenue | 25.2x | 23.7x |
| Trailing gross margin | 65.7% | 50.6% |
| Market value / gross profit | 38.4x | 46.7x |
This is a simple metric you get by dividing sales multiple by gross margin. It’s not an official accounting ratio.
The tough part is getting it right. Marvell’s thinner margin means its sales multiple is a bit lower, but it still gets about 22% more market value for every dollar of trailing gross profit. Broadcom has its own issue—Apple has made up around 20% of revenue. So if Apple insources, AI capital spending slows, or custom-chip margins take a hit, the growth built into Broadcom’s stock price could be at risk.
Broadcom turned in a solid fiscal second quarter, with revenue up 48% to $22.19 billion. The company now guides to about $29.4 billion in revenue for the current quarter. But AI-chip sales are where expectations came up short, with Broadcom forecasting $16 billion, missing the $16.36 billion analysts polled by Visible Alpha wanted. “The market demands perfection for this chip rally to keep running,” said Ryan Lee, investment strategist at Direxion. Broadcom Inc.
Marvell posted a record fiscal Q1 revenue of $2.42 billion, up 28%, and guided to around $2.7 billion for this quarter. CEO Matt Murphy pointed to “strong demand and exceptional bookings across our entire data center portfolio.” Marvell is targeting custom-chip revenue above $10 billion in fiscal 2029 and sees total fiscal 2028 sales near $16.5 billion, setting a higher growth bar and a tighter timeline. SEC
Markets open Monday facing two hurdles for chip valuations. U.S. CPI hits Tuesday, and PPI lands Wednesday—both could shift bond yields. ASML Holding NASDAQ:ASML reports Wednesday, Taiwan Semiconductor NYSE:TSM follows Thursday. Watch for updates on equipment demand, chip capacity and what customers are spending. Those details are the next check on how fast the AI investment story is playing out against high-flying Broadcom and Marvell.
Related articles: NASDAQ:AVGO
