Nvidia is becoming more of a passion for investors looking for outsized returns.
Blayne Curtis, an analyst at Jefferies, says that the artificial intelligence darling was the biggest contributor to the S&P 500’s overall returns in the year 2024. NVDA is also a good pick for this coming year “on the edge of the Blackwell ramp.”
He believes that two other AI chip stocks, Broadcom Inc. (NASDAQ: AVGO), and Marvell Technology Inc. (NASDAQ: MRVL), could still outperform Nvidia in 2025.
Why is Jefferies bullish about Broadcom stock
Blayne Curtis, who is a leading expert on 2025, continues to believe that Broadcom shares have more than doubled in the past year.
He expects AVGO will be the best performing chip stock in this year.
The Jefferies analyst is extremely bullish on Broadcom’s stock because of its solid and rapidly-growing customer base.
He said that AVGO’s average selling price will increase significantly as its application-specific circuits continue to play a key role in the artificial intelligent landscape.
Curtis expects Broadcom will earn $10.11 per share in 2027. He believes that number could even exceed $12 if the company can “achieve the low end” or its estimated addressable market.
AVGO executives have recently forecast a $60-90 billion SAM by 2027.
The Jefferies analyst has set a price goal of $300 for Broadcom, which indicates a potential 35% increase in 2025. AVGO shares also pay a current dividend yield of 1.04%.
Why is Jefferies bullish about Marvell stock
Marvel shares have also risen more than 100% in the last six months, but Blayne curtis is still convinced that they will continue to rise significantly by 2025.
The Jefferies analyst recommends staying with MRVL, or even increasing a position in it when the stock dips, primarily because Amazon.com Inc. relies on Marvell Technology to produce its Trainium 2 AI chip.
He expects Marvell to benefit from the growing demand for custom artificial-intelligence chips.
Marvell Technology expects to generate $1.5 billion of AI revenue in FY25, and another 66% growth year-on-year to $2.5 billion by FY26. But a partnership with more companies may help it surpass these estimates.
Jefferies believes that Marvell’s shares are cheap compared to its peers, as they trade at about 53 times the FY26 EBITDA.
In December, MRVL announced its financial results for the quarter which easily surpassed Street estimates. It also provided optimistic guidance for Q4.
Chief executive Matt Murphy said at the time that our custom AI silicon programs were “now in volume production”. This was further augmented by the robust demand from cloud clients for our market-leading products.
Marvell stock pays a dividend yield at the time of writing of 0.21%.
This post Two AI chip stocks that could outperform Nvidia by 2025: Should you invest now? This post may be updated as new information becomes available
This site is for entertainment only. Click here to read more
