Nvidia's AI Chip Competition Is Gaining Momentum

In addition to questions about software stocks, including ServiceNow (NOW) , TheStreet Pro members have asked us about Marvell (MRVL) shares, which, along with Broadcom (AVGO) shares, have come under renewed stress in recent days.

That stress came even though capex spending levels at Microsoft (MSFT) and Meta (META) will remain brisk, especially at Meta, given its sizable step in 2026 compared to 2025. The “second half” of those closely watched capex spending plans and surrounding comments from Alphabet (GOOGL) and Amazon (AMZN) will come after Wednesday's market close and Thursday's, respectively.

One would think that we’ve seen a slowdown in AI and data center spending comments, given the way the shares of Marvell and Broadcom have traded off. But it’s been quite the opposite. At the same time, over this past weekend, The New York Times had a wonderful article about the growing chip businesses at Amazon and Google, naming them Nvidia’s (NVDA) “toughest competition.” That reaffirmed our positions in Marvell and Broadcom, but the icing on the cake was the following:

"Companies like Anthropic and OpenAI are striking deals with chip makers other than Nvidia to get their hands on as much raw computing power as they can, said Daniel Newman, an analyst at the Futurum Group. As a result, he and his firm predict, the market for Nvidia alternatives will grow faster over the next two years than the market for Nvidia’s chips."

That last comment is certainly constructive for our MRVL and AVGO shares, but they also lend quite a bit of support to the upbeat comments made by Marvell CEO Matt Murphy back in early December. Since then, we’ve gotten strong December quarter results and guidance from Taiwan Semi (TSM) and the aforementioned capital spending comments from Meta and Microsoft. Very recent comments from Super Micro Computer (SMCI) and Lumentum (LITE) add another layer of support.

Super Micro Computer

In a tough tape, shares of Super Micro Computer are still up nicely following Tuesday night’s earnings report that was driven by AI infrastructure demand that continues to accelerate “across every major customer segment.”

Those segments include enterprise, OEM appliance and the large data center segment. December quarter revenue rose 123% year over year (153% quarter over quarter) to $12.7 billion, a figure that also easily cleared the company’s revenue guidance of $10 billion to $11 billion for the quarter. Super Micro expects net sales of at least $12.3 billion for the current quarter, which implies about $10 billion for the June quarter to hit management’s $40 billion revenue target for fiscal 2026.

Arguably, that sounds on the conservative side, but the takeaway from Super Micro is that more servers are being shipped, which means it needs more AI and data center chips.

Lumentum

Lumentum posted record quarterly revenue of $665.5 million, up more than 65% year over year and almost 25% compared to the September quarter. It is benefiting from strong demand for optical components as AI network demand continues to grow.

Management shared that it expects to take another step up with its March revenue guidance midpoint of $805 million, which points to a 85% plus year-over-year increase. Two-thirds of the sequential increase in revenue is expected to be driven by components, with the remainder from systems, as high-speed transceivers and optical contributions ramp. Management also shared its optical backlog surged during the December quarter, moving well past $400 million, which will ship in the second half of 2026.

We see that as supportive of Marvell’s enterprise networking and carrier infrastructure business, as well as networking/connectivity demand inside Broadcom’s semiconductor solutions segment.

What Does That Tell Us?

The demand picture remains robust for AI, data center, and networking chips, which allows us to keep a steady hand on the wheel for our MRVL, AVGO and Arista Networks (ANET) positions at a time when market jitters are weighing on them.

ANET shares have closed the gap that was created in mid-December and are nearing support at the 50-day moving average ($131.10).

AVGO shares are also approaching their 200-day moving average at 306.69, a move that has closed the early September gap in the chart. When we initiated our AVGO position, we noted that gap, sharing that when it closes, that could be a nice place to add shares.

Marvell shares are a bit trickier as the slide over the last few days has landed them below their 50-, 100- and 200-day moving averages, placing them on a course that could see them land in an oversold condition. We have been here a few times over the last two years, notably in August 2024, April 2025 and September 2025. In each case, Marvell shares rebounded as supporting data was released and Marvell management shared its progress in AI and data center, custom AI chips and the rebound for its enterprise networking and carrier infrastructure business.

Given the comments above and below, we can be patient in the near-term with MRVL shares. We’ve bulked up on our ANET and AVGO exposure in November and January, and we have some room to nibble further. Let’s first wait and see if those support levels hold and go from there.

Coming Up: SiTime and Alphabet

After Wednesday's market close, we’ll get quarterly results from EPS Diplomats resident SiTime (SITM) and Alphabet.

When it comes to AI and data center demand, much attention will be on Alphabet’s capital spending forecast for the coming year but given our positions in Marvell and Broadcom, we will want to hear what it says about its AI chip efforts and the ramp in its Ironwood tensor processing unit (TPU).

Back in November, SiTime guided December quarter revenue to $100 million to $103 million, up from $83.6 million in the September quarter and $68 million in the December 2024 quarter. In that completed quarter, roughly half of SiTime’s revenue came from its Communications, Enterprise and Data Center customers, with that revenue up an impressive 115% year over year. In the December quarter, AI and data center were expected to remain the leading growth driver for that top-line expansion.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long NOW, MRVL, AVGO, MSFT, META, GOOGL, AMZN, NVDA and ANET.