Broadcom and 2 More Chip Stocks to Play the AI Boom That Aren’t Nvidia

The rise of artificial intelligence has created a boom in various parts of the semiconductor sector. (Getty Images/Cultura RF)

Key Points

• Broadcom’s AI-related revenue is projected to increase by 64% this year, with Oppenheimer raising its target price to $400.
• Marvell Technology is expected to see significant revenue acceleration from 2027 due to its work on Microsoft’s Maia AI chips.
• Monolithic Power Systems, a supplier of power-management chips for Nvidia, has a target price of $1,200 from Oppenheimer.

Nvidia is the undisputed king of the artificial-intelligence chips, but that doesn’t mean other companies aren’t also riding the AI wave.

Broadcom , Marvell Technology , and Monolithic Power Systems look like good bets ahead of earnings, according to Oppenheimer analysts.

Broadcom hardly needs much of an introduction at this point. The custom chip designer’s stock is up 48% this year so far through Tuesday’s close. The shares’ latest boost came from the company’s deal with ChatGPT-developer OpenAI, which is likely to be worth multiple billions of dollars.

Still, Broadcom’s valuation could raise eyebrows. The stock trades at a price-to-earnings multiple of 29 times Oppenheimer’s forecasts for its 2027 earnings, making it more expensive than Nvidia’s 25 times multiple on the same measure.

That’s not putting off Oppenheimer’s Rick Schafer, though. He raised his target price on Broadcom to $400 from $350 in a research note on Wednesday, and kept an Outperform rating on the stock. He expects the company’s AI-related revenue to rise 64% this year, which would broadly match Nvidia’s expected data-center growth. Broadcom shares were up 2.1% at $351.20 in early trading Wednesday.

“The combination of expanding earnings power over time, sticky/stable industrial/infrastructure exposure, and defensible technology gives us confidence in Broadcom’s business and financial model,” Schafer wrote. “We believe Broadcom deserves to trade at a multiple above the group [of peer semiconductor companies].”

Marvell Technology, meanwhile, has been by far the less popular play on custom AI chips. Its stock has sunk 22% so far this year through Tuesday’s close amid questions over the future of its contracts with big customers such as Amazon.com and Microsoft .

However, Oppenheimer’s Schafer says Marvell could deliver significant revenue acceleration from 2027 onward, linked to its work on Microsoft’s in-house Maia AI chips. He recently raised his target price on Marvell to $115 from $95. That implies a price-to-earnings multiple of 31 times his forecast for Marvell’s earnings in 2027.

“We believe the multiple is justified given Marvell is expanding in the high growth cloud DC [data center] AI market and offers, in our opinion, the best pure play 5G infrastructure portfolio in the industry,” wrote Schafer.

Marvell shares were up 1.1% at $87.20 in Wednesday trading.

Monolithic Power isn’t exactly a diversification play, considering much of its business comes from providing power-management chips to be integrated with Nvidia’s hardware. Its stock is also already up 64% this year through Tuesday’s close. But being a top seller to multiple AI chip companies and its presence in the automotive, industrial and communications sectors means there’s further to go for the stock, according to Schafer.

Schafer has a $1,200 target price on Monolithic Power. Shares were up 2.9% at $996.07 in early trading. The analyst’s price target is a hefty price-to-earnings multiple of 44 times his forecast for the company’s 2027 earnings.

“We believe it’s justified by expectations of strength in server, communications and auto verticals, and overall growth expected to exceed peers by 10%—15% long term,” Schafer wrote.

Write to Adam Clark at adam.clark@barrons.com