There is an increasing trend toward compiling from C to custom hardware for designing embedded systems in which the area and power consumption of application-specific functional units, registers, and memory blocks are heavily dependent on the bit-widths of integer operands used in computations. The actual bit-width required to store the values assigned to an integer variable during the execution of a program will not, in general, match the built-in C data types. Thus, precious area is wasted if the built-in data type sizes are used to declare the size of integer operands. In this paper, we introduce stochastic bit-width estimation that follows a simulation-based probabilistic approach to estimate the bit-widths of integer variables using extreme value theory. The estimation technique is also empirically compared to two compile-time integer bit-width analysis techniques. Our experimental results show that the stochastic bit-width estimation technique dramatically reduces integer bit-widths and, therefore, enables more compact and power-efficient custom hardware designs than the compile-time integer bit-width analysis techniques. Up to 37% reduction in custom hardware area and 30% reduction in logic power consumption using stochastic bit-width estimation can be attained over ten integer applications implemented on an FPGA chip.