Bank of America: Marvell-Google deal won't undermine Broadcom's core TPU share, with the latter still accounting for $250B-$350B in value

According to Chaoshang Research, a Bank of America report issued on August 19 indicates that Marvell and Google have entered into a new warrant agreement to form a custom chip partnership, tied to up to $120 billion in cumulative procurement from Google, under which Marvell will receive approximately 60 million shares. While the market is concerned about potential dilution of Broadcom's share in Google's TPU supply, Bank of America assesses that Marvell's role remains confined to XPU-adjacent chips, with core compute chips remaining under Broadcom's control. Bank of America projects Google's total capital expenditure over the next five years will range from $1.5 trillion to $2 trillion, with TPU systems representing 25% to 30%, equating to a $400 billion to $600 billion total addressable market. Broadcom is expected to capture 55% to 60% of the value share ($250 billion to $350 billion), while Marvell will secure 10% to 20% through XPU-attach components ($50 billion to $100 billion). MediaTek is projected to take 20% to 30% of the cost-optimized chip segment. Bank of America maintains its Buy rating on Broadcom with a $530 price target and reaffirms Marvell as its top pick in the connectivity chip sector, setting a price target of $365.