Broadcom is stabilizing its custom silicon business as Google intensifies competition by turning custom chip development into an open contest among multiple vendors.

Broadcom (AVGO) edged approximately 0.2% higher to $359.58 on Tuesday morning, recovering from a sharp selloff triggered last week by the Google-Marvell agreement. Under the terms of the arrangement, Google (GOOG) can acquire almost 59 million Marvell (MRVL) shares as specific purchasing milestones are satisfied. The partnership aligns the two companies across custom accelerators, networking equipment, storage solutions, and memory-interface products.

While the competitive threat is credible, Broadcom is not entering the fight empty-handed. Its fiscal second-quarter AI semiconductor revenue surged 143% to $10.8 billion. Additionally, Broadcom maintains a long-term relationship with Google that covers future custom processors and AI-rack components. Marvell’s win broadens Google’s options, but it does not instantly unwind Broadcom’s installed engineering position.

The deeper risk centers on bargaining power. A credible secondary supplier grants Google leverage over pricing, development schedules, and future chip allocation, even if Broadcom retains substantial volume. Tuesday’s stabilization suggests investors are rejecting the most extreme displacement scenario. The next earnings report must show whether Broadcom’s AI growth can remain extraordinary while its largest customers deliberately cultivate alternatives.