ASICs to Overtake GPUs as AI Data Center Standard, Goldman Says; Broadcom (AVGO), Marvell (MRVL) in Focus

Goldman Sachs research predicts application-specific integrated circuits (ASICs) will surpass graphics processing units (GPUs) as the dominant AI data center computing platform, a shift already underway. Broadcom (AVGO) and Marvell Technology (MRVL) are the two main beneficiaries, commanding significant market share in custom chip design. Broadcom reported AI revenue of $8.4 billion in its fiscal first quarter, up 106% year-over-year, driven by demand for custom AI accelerators. Counterpoint Research estimates Broadcom will hold at least 60% of the custom chip market through 2027, serving clients including Google, Microsoft, and Apple. Marvell’s custom chip business doubled in its last fiscal year, with management forecasting continued strength in 2026. On May 24, analysts at Oppenheimer, Wells Fargo, and RBC raised price targets on Marvell citing robust AI hardware demand. Both stocks trade at elevated valuations, but analysts caution that waiting for a cheaper entry could prove costly given the long-term growth trajectory. Bloomberg Intelligence projects custom chip demand growing at a 27% annual rate through 2033.