Some of the top AI stocks of the last few years have been the chipmakers. AI accelerators and graphics processing units (GPUs) are necessary for efficient AI training and inference.
More recently, makers of memory chips have seen their share prices climb as demand for the memory components integrated with GPUs has climbed much faster than supply.
Investors may be wondering if there are any good AI chip stocks you can buy with just $100. Luckily, it looks like the market is giving investors an opportunity to buy one of the most important AI chipmakers in the market at a price well below $100, and it looks like a great value.
Image source: Getty Images.
The other custom AI chipmaker
Broadcom gets a lot of attention for its custom AI accelerator chips designed for multiple hyperscaler customers, but its rival chip designer Marvell Technology (MRVL 2.11%) looks like a much better stock right now.
Shares have been beaten down, however, on fears that Broadcom may take some of Marvell's business. In December, The Information, a website devoted to tech news, reported that Microsoft was in talks with Broadcom to work on a custom AI accelerator chip. Microsoft represents a key customer for Marvell, since it plans to ramp up the use of its Maia chip over the next two years.
But Marvell's outlook for the next couple of years appears to be unaffected. Management expects its custom chips business to grow 20% in fiscal 2027, and CEO Matt Murphy said it has several high-volume custom designs in development for 2028.
It also sees opportunity to win more sales for its interconnect chips, which ensure data moves quickly and efficiently from one server to another. As data centers expand and large language models use more data, the need for powerful networking chips grows exponentially. Overall data center revenue is expected to grow 25% next year.
NASDAQ: MRVL
Key Data Points
But fiscal 2028 could be even better. Microsoft is expected to ramp up production for its Maia chips that year. It could spend as much as $12 billion on the chip that year, according to a research report from Fubon, a Taiwanese financial services group.
Meanwhile, Microsoft and other hyperscaler cloud customers are increasing their capital expenditures faster than analysts had anticipated. That should act as a tailwind for the entire semiconductor sector.
And even if Marvell doesn't maintain a monopoly on Microsoft's business, it has plenty of other customers. It counted 18 custom computing designs as of its investor day last year, including deals with all four major U.S. hyperscalers.
Meanwhile, its optical connectivity chips are best in class and will remain a staple in data center equipment. It recently bolstered that segment with the acquisition of Celestial AI, which specializes in optical connectivity to improve efficiency and speed of AI accelerators. Management expects to ramp up revenue from its product to $500 million by the end of fiscal 2028 and double it by the end of 2029.
The competitive concerns have driven Marvell's share price lower, reaching $74 as of this writing. The stock now has a forward price-to-earnings ratio (P/E) of 21. By comparison, Broadcom's forward P/E is nearly 31. At this price, the smaller chip company looks like a great opportunity for an investor with $100 to get into AI semiconductor stocks.
