Nvidia (NASDAQ:NVDA) closed Friday at $230.36, 2.6% below its 52-week high. Four of its biggest artificial intelligence (AI) chip peers ended the week nowhere near theirs. Advanced Micro Devices (NASDAQ:AMD) sits about 18% below its high, Micron Technology (NASDAQ:MU) about 19%, Broadcom (NASDAQ:AVGO) about 28%, and Marvell Technology (NASDAQ:MRVL) about 32%.
That spread is strange, because one wave of data center spending is paying all five companies. Nvidia expects capital spending by the five biggest hyperscalers (the biggest cloud and internet companies) to land near $800 billion this year and reach $1.3 trillion in 2027.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Do the discounts rank the opportunities? I don’t think they do.
Image source: Nvidia.
Nvidia’s small discount is earned
Nothing in Nvidia’s business has cracked. Revenue in the fiscal second quarter of 2027 (the period ended July 26) was $96.2 billion, up 106% year over year. Growth accelerated from the prior quarter’s 85%.
Data center revenue was $89 billion, up 117%. And management guided the fiscal third quarter to $108 billion.
Nvidia’s chief financial officer, Colette Kress, told analysts in late August to expect fiscal 2028 revenue growth of about 70% — a figure that reflects what the company can manufacture, not what customers want.
Shares cost about 15 times analysts’ fiscal 2028 earnings estimates. For growth like that, the price still looks reasonable to me.
The two deepest discounts just raised their outlooks
Broadcom reported its fiscal third quarter of 2026 (the period ended Aug. 2) on Wednesday. AI semiconductor revenue reached $16.7 billion, up 221% year over year and 54% from the prior quarter, and management expects $21.7 billion in the current quarter.
Even more, CEO Hock Tan told analysts he is looking to double AI revenue to $115 billion next fiscal year, and in fiscal 2028 to double it again, to $230 billion. Those targets lean on a short list of customers (OpenAI and Anthropic among them) deploying on schedule.
In other words, the group’s fastest guided AI growth belongs to its second-deepest discount. Analysts’ fiscal 2027 estimates put the stock at about 19 times earnings.
Marvell’s discount is the deepest of the four. Its late-August report covered the fiscal second quarter of 2027 (the period ended Aug. 1). Revenue was a record $2.7 billion, up 37% year over year. Data center revenue (now 79% of the total) grew 46%. And CEO Matt Murphy said the company was again raising its revenue outlook for fiscal 2027 and fiscal 2028.
