1 Beaten-Down Artificial Intelligence Stock to Buy With $100 Right Now

Marvell Technology (NASDAQ: MRVL) is presented as a compelling, lower-priced AI semiconductor exposure after its shares fell to about $74 amid fears of losing Microsoft business to Broadcom; the stock trades at a forward P/E of ~21 versus Broadcom’s ~31. Management forecasts custom chips revenue growth of 20% in fiscal 2027, has multiple high-volume custom designs in development for 2028, and reported 18 custom computing designs across hyperscalers; separately Marvell expects Celestial AI-related optical connectivity revenue to ramp to $500 million by end of fiscal 2028 and to double by end of fiscal 2029. The note highlights industry tailwinds — data-center revenue projected to grow ~25% next year, hyperscaler capex accelerating, and a Fubon estimate that Microsoft could spend up to $12 billion on its Maia chip in 2028 — supporting the view that Marvell’s diversified product set and valuation make it an attractive buy for investors.

Analysis

Market structure: The near-term winner is Marvell (MRVL) if it retains material Maia volume and captures optical/connectivity upside from Celestial AI (management targets $0.5bn FY2028 → $1.0bn FY2029). Hyperscalers and foundries (memory/GPU suppliers, NVDA indirectly) also benefit from a 25%+ data-center revenue growth next year; Broadcom (AVGO) stands to gain if it wins MSFT but may face margin pressure as hyperscalers demand multi-sourcing.

Risk assessment: Tail risks include MSFT switching majority volumes to Broadcom (loss >$1–3bn revenue risk to MRVL over 2027–28), failed integration/technical setbacks at Celestial, and foundry allocation shortages. Immediate risk (days) is sentiment/rumor-driven price moves; short-term (weeks–months) hinges on Qs, hyperscaler capex prints, and any Broadcom-Microsoft announcement; long-term (2028) is the Maia spend (Fubon estimate $12bn) and Marvell’s execution on 18 custom designs.

Trade implications: Establish a modest 2–3% long MRVL exposure now (buy stock or 12–18 month call spread) and scale to 4–6% if MRVL < $65 or if FY Qs show accelerating custom-design revenue; use a 15–20% stop-loss or hedge with 6–9 month puts on deterioration. Pair trade: long MRVL vs short AVGO sized 2:1 (MRVL overweight) to express valuation gap (MRVL fwd P/E 21 vs AVGO ~31). Options: buy a Jan 2028 MRVL call spread (e.g., long $75 / short $120) sized to risk 0.5–1% portfolio to capture Maia ramp.

Contrarian angle: The market likely overprices the single-customer fear; MRVL’s 18 custom designs and interconnect moat make full displacement unlikely — mispricing implied by 40% P/E gap to AVGO. Historical analogues (networking ASIC suppliers) show big customers dual-source or phase transitions over years, not overnight. Watch for unintended consequences: Broadcom winning MSFT could drive hyperscalers to insist on dual-sourcing, increasing MRVL’s addressable market rather than eliminating it.

Key Decisions for Investors

• Establish a 2–3% long position in MRVL (stock or equivalent delta in calls) immediately to capture AI/datacenter optical upside; scale to 4–6% if MRVL drops below $65 or next two quarterly reports show custom-design revenue growth >15% YoY. Set a tactical stop-loss at 15–20% below entry.
• Implement a relative-value pair: long MRVL (2 units) / short AVGO (1 unit) to exploit valuation spread (MRVL fwd P/E ~21 vs AVGO ~31) and asymmetric upside if hyperscaler capex surprises positively over 6–18 months.
• Buy a limited-risk options position to capture the 2028 Maia ramp: Jan 2028 MRVL call spread (e.g., long $75 / short $120) sized to risk 0.5–1% of portfolio; roll or take profit if MRVL > $110 before expiry.
• Hedge downside catalyst risk (Microsoft deal headlines, poor Celestial integration) by purchasing 6–9 month MRVL protective puts sized to cover 50–75% of the equity position if a definitive Broadcom-Microsoft procurement announcement occurs within 90 days.