Nvidia is near its high, but Broadcom and Marvell are cheaper.
Both raised outlooks despite discounts.
The author advises buying them and Nvidia.
What happened
Nvidia closed Friday at $230.36, 2.6% below its 52-week high, while AMD, Micron, Broadcom, and Marvell sit 18% to 32% below their highs. The author argues these discounts don't rank the opportunities.
Why it matters
All five benefit from the same wave of data center spending, with Nvidia expecting hyperscaler capital spending to reach about $800 billion this year and $1.3 trillion in 2027. Broadcom and Marvell have the deepest discounts but just raised their outlooks, which the author sees as a mismatch worth buying into.
What to watch
Whether Broadcom and Marvell can meet their aggressive growth targets, which hinge on a short list of customers like OpenAI and Anthropic deploying on schedule. Watch Broadcom's guidance for $21.7 billion in AI revenue this quarter and its targets to double AI revenue to $115 billion next fiscal year and $230 billion in fiscal 2028.
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The article frames the chip sector's valuation gap as a misreading of growth prospects. Nvidia's small discount is justified by its continued acceleration, but Broadcom and Marvell, with the deepest discounts, have just raised their outlooks, suggesting the market is pricing in problems that may not materialize. The contrast highlights how investor caution can diverge from company fundamentals.
Broadcom's growth is tied to a few customers, and Marvell's margin dip is seen as a cost of winning, not a demand issue. The author's advice to buy these stocks hinges on whether these companies can deliver on their aggressive targets, especially with deployment schedules and memory costs as potential risks. The outcome will test whether the market's patience or the companies' earnings paths prove more accurate.
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Marvell Technology stock rose 6% to $220.54 on Friday, while Qualcomm fell 0.33% to $168.01
