Nvidia closed Friday just 2.6% below its 52-week high, while AMD, Micron, Broadcom, and Marvell each sit 18% to 32% off theirs despite riding the same wave of AI data center spending. Motley Fool analyst Daniel Sparks argues the gap doesn't rank the opportunities: Broadcom and Marvell just raised their outlooks anyway.
A gap that doesn't match the growth
Nvidia (NVDA +0.84%) closed Friday at $230.36, 2.6% below its 52-week high. Four of its biggest AI chip peers ended the week much further from theirs: Advanced Micro Devices sits about 18% below its high, Micron Technology about 19%, Broadcom about 28%, and Marvell Technology about 32%. That spread is unusual, because one wave of data center spending pays all five companies — Nvidia expects capital spending by the five biggest hyperscalers to reach near $800 billion this year and $1.3 trillion in 2027.
Nvidia's small discount is earned
Nothing in Nvidia's business has cracked. Revenue in its fiscal second quarter of 2027 reached $96.2 billion, up 106% year over year, accelerating from the prior quarter's 85% pace.
Data center revenue was $89 billion, up 117%, and management guided the fiscal third quarter to $108 billion. Chief financial officer Colette Kress told analysts in late August to expect fiscal 2028 revenue growth of about 70%. Shares now trade at about 15 times analysts' fiscal 2028 earnings estimates.
Broadcom and Marvell just raised their outlooks
Broadcom's AI semiconductor revenue reached $16.7 billion in its fiscal third quarter, up 221% year over year and 54% from the prior quarter, with management guiding to $21.7 billion next quarter. CEO Hock Tan told analysts he is looking to double AI revenue to $115 billion next fiscal year, then double it again to $230 billion in fiscal 2028, though those targets lean on a short list of customers, including OpenAI and Anthropic, deploying on schedule. Analysts value the stock at about 19 times fiscal 2027 earnings estimates.
Marvell's discount is the deepest of the four. Its fiscal second-quarter revenue hit a record $2.7 billion, up 37% year over year, with data center revenue growing 46% to 79% of the total, and CEO Matt Murphy raised the company's outlook for fiscal 2027 and fiscal 2028.
Yet shares fell about 10% the next day as management's gross margin forecast implied giving up about a point to lower-margin custom AI chips. The stock trades near 33 times next fiscal year's estimates.
AMD and Micron diverge
AMD's revenue rose 50% year over year to $11.5 billion, with data center sales more than doubling to $6.7 billion, or 58% of the total. Even 18% below its high, the stock costs about 31 times next year's estimated earnings.
Micron's revenue more than quadrupled year over year to $41.5 billion, with management guiding the next quarter to about $50 billion at a gross margin around 86% — yet the stock sits at about 6.5 times next fiscal year's estimates.
Sparks says the discounts measure the market's patience rather than the companies' earnings paths, and he'd put new money into Broadcom and Marvell at these prices while still buying Nvidia near its high.
Source: The Motley Fool
Trading involves risk.
Risk Disclaimer
