Nvidia is 'both king and kingmaker,' and these chip stocks could pop in its wake

By Emily Bary

Marvell and Astera Labs can continue growing alongside Nvidia, according to Jefferies

Nvidia Corp. doesn't just dominate the chip world currently. It also has the power to lift other chip stocks in its wake.

In that sense, the company "remains both king and kingmaker," according to Jefferies analyst Blayne Curtis, who lifted his price target on Nvidia's stock (NVDA) to $150 from $135.

Admittedly, that boost didn't do much to help Nvidia's stock on Monday, as it was down more than 3% in morning action and on pace to see a $340 billion erasure of market capitalization during its current three-session losing streak.

Read: Nvidia is one of the 'three horsemen of AI.' Here are the others.

But Curtis also chimed in on Nvidia's ability to impact the broader chip landscape, noting that Marvell Technology Inc. (MRVL) and Astera Labs Inc. (ALAB) can continue growing alongside the semiconductor powerhouse. The catch, though, is that Nvidia could flip a switch down the road and change that course. In other words, the company's "decisions on each generation could materially alter" the winners and losers, according to Curtis.

For now, though, Astera Labs looks to be a "content gainer" in Nvidia's GB200 product, part of its new Blackwell lineup, Curtis wrote. While Astera Labs benefited from having its "retimers" on Nvidia's HGX platform, he noted that Nvidia's GB200 doesn't need retimers. Still, he thinks Astera Labs could have won business in the GB200 through the Peripheral Component Interconnect Express switch, or PCIe switch, positioning it to still benefit from Nvidia's new lineup.

See also: Apple offers a bullish lesson for Nvidia, even as the chip stock dips

Meanwhile, he said that Marvell has become a popular short play among AI chip names, particularly as investors debate the ramp and competitive positioning of its application-specific integrated circuits.

Curtis will soon meet with Marvell's management team. "We will look to explore the ASIC side on the trip as well as explore the optical trends where we do feel that investors don't believe the business will re-accelerate but would believe the business should mirror [Nvidia's] positive trends," he wrote.

At the same time, Curtis said that "it's too early to call any losers for 2025," though he and his team "do see growing concern for AMD's pipeline." Advanced Micro Devices Inc.'s stock (AMD) has also become increasingly popular among short sellers, he said.

Don't miss: Here's why AMD's stock was just dubbed a top pick

-Emily Bary

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06-24-24 1017ET

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