Beyond Nvidia—The Hunt for the Next AI Chip Winner
When most investors think of artificial intelligence (AI) chips, the name Nvidia (NVDA) immediately comes to mind. Nvidia’s dominance in GPUs has fueled one of the most remarkable Wall Street runs in recent history. But as AI demand continues to surge, other companies are quietly positioning themselves as the next big chip winners.
Two standout names—Broadcom (AVGO) and Marvell Technology (MRVL)—are attracting strong analyst ratings and significant investor interest. Both companies are rated “Strong Buy” on Wall Street, and their technology portfolios show why they could become essential players in the AI revolution.
Here’s a closer look at these two AI chip stocks—and why they might belong in your portfolio.
Chip Stock #1: Broadcom (AVGO)
The Broadcom Advantage
Broadcom, valued at $1.4 trillion, is more than just a semiconductor company. It’s a global tech leader that operates across two major segments:
- Semiconductors – powering data centers, AI clusters, networking, wireless, and storage solutions.
- Infrastructure Software – driven by its VMware acquisition, which strengthens its cloud and virtualization offerings.
AI-Powered Growth
- Q2 Revenue: $15 billion (20% YoY increase).
- AI Semiconductor Revenue: $4.4 billion (46% YoY growth).
- Gross Margin: 79.4%, showing a strong product mix.
- Free Cash Flow: $6.4 billion, or 43% of revenue.
Broadcom’s Tomahawk switches and Jericho routers are critical for hyperscale AI clusters, making its networking solutions indispensable for cloud giants.
Software Division Strength
The VMware Cloud Foundation (VCF) is gaining traction, with 87% of Broadcom’s top customers already onboard. This adds a recurring revenue stream that complements its AI semiconductor business.
Wall Street’s Take
- Analyst Ratings: 33 “Strong Buy,” 1 “Moderate Buy,” 3 “Hold.”
- Average Price Target: $302.78 (3% upside).
- High Price Target: $400 (36% upside).
Broadcom’s strong balance sheet, AI dominance, and VMware integration make it one of the most compelling AI chip plays beyond Nvidia.
Chip Stock #2: Marvell Technology (MRVL)
The Marvell Edge
Marvell, with a market cap of $63 billion, doesn’t compete directly with Nvidia or Intel in GPUs or CPUs. Instead, it specializes in custom silicon, networking, and AI cloud infrastructure chips—a niche that has positioned it as a fast-growing complement to Nvidia’s ecosystem.
AI-Driven Results
- Q1 Revenue: $1.89 billion (63% YoY increase).
- Adjusted EPS: $0.62 (up 158%).
- Data Center Revenue: $1.44 billion (76% YoY increase).
- AI Sales: Now the majority of its revenue.
Marvell has already integrated Nvidia’s NVLink Fusion into its custom silicon platform, strengthening its role in powering large-scale AI systems.
Portfolio Optimization
Marvell has been streamlining its focus:
- Sold its Automotive Ethernet business to Infineon for $2.5 billion.
- Reinforcing its position in cloud AI, 5G, and data infrastructure.
Wall Street’s Take
- Analyst Ratings: 24 “Strong Buy,” 2 “Moderate Buy,” 7 “Hold.”
- Average Price Target: $92.86 (27.2% upside).
- High Price Target: $149 (104% upside).
With AI now at the core of its business, Marvell could deliver triple-digit stock gains if growth continues at its current pace.
Comparison: Broadcom vs. Marvell in the AI Chip Race
| Category | Broadcom (AVGO) | Marvell Technology (MRVL) |
|---|---|---|
| Market Cap | $1.4 Trillion | $63 Billion |
| AI Revenue Growth | 46% YoY | 76% YoY |
| Key Strength | Networking & VMware | Custom Silicon for AI |
| Balance Sheet | $9.5B cash, $69.4B debt | $886M cash, $4.2B debt |
| Analyst Rating | 89% “Strong Buy” | 73% “Strong Buy” |
| Potential Upside | 36% (High Target) | 104% (High Target) |
👉 Broadcom offers stability and scale, while Marvell provides higher-risk, higher-reward growth potential.
FAQs: AI Chip Stocks
Q1: Are Broadcom and Marvell direct competitors to Nvidia?
Not directly. Nvidia dominates GPUs, while Broadcom leads in networking and Marvell focuses on custom AI silicon and infrastructure.
Q2: Which stock has higher upside potential?
Marvell has a higher percentage growth potential, but Broadcom offers stronger stability and consistent cash flow.
Q3: Is now the right time to buy AI chip stocks?
With AI demand accelerating across industries, both Broadcom and Marvell are strategically positioned for growth. Investors should, however, consider risk tolerance.
Q4: Could Marvell or Broadcom launch their own GPUs?
Currently, both companies are leveraging partnerships and custom silicon instead of competing head-on with Nvidia.
Q5: Which is better for long-term holding?
Broadcom is a safer long-term bet due to size and recurring software revenue, while Marvell could reward risk-tolerant investors with higher returns.
Final Outlook: Two AI Stocks That Deserve Attention
The AI revolution is no longer just about Nvidia. Broadcom and Marvell Technology are carving their own paths, each addressing critical pieces of the AI infrastructure puzzle.
- Broadcom (AVGO) delivers stability, scale, and recurring revenue through AI semiconductors and VMware.
- Marvell (MRVL) offers explosive growth potential with custom silicon and data center AI dominance.
For investors seeking diversification in the AI chip sector, these two names could be smart additions to a portfolio in 2025 and beyond.
Reference : Sushree Mohanty