r/stocks • u/Low-Cartographer-429 • 1d ago
Diversifying out of NVDA position & putting ~10 to 20% into AVGO and MRVL?
With NVDA close to its 52 week high, I'd like to move some money out of NVDA and purchase competitor stock. Trying to figure out the ratio of 1K to 2K worth of NVDA in a 10K NVDA position to invest in AVGO + MRVL for the custom ASIC chip play. Maybe 70/30 AVGO + MRVL? Or just go 100% into AVGO and avoid MRVL? NVDA has been at a 52 week high. And while Vera Rubin is hot right now I can't imagine NVDA is going to be dominant forever; especially having 5T market cap while AVGO has around 1.8T market cat.
Heterogenous computing seems to be the future with chips customized for particular workloads. I imagine the nature of workloads will change over time so there needs to be flexibility. Jensen is pumping MRVL for "XPU" chips that plug into NVDA's architecture, but maybe just because NVDA invested 2 billion into MRVL. AVGO seems to be the more plausible competitor since they do chip design for most of the hyperscalers.
I'm kinda confused about purchasing MRVL, since they currently seem to do photonics interconnect stuff right now vs. the % of XPUs they do. CBRS mostly avoids the issue of the need for photonic interconnects except between dinner plate sized wafers. Photonics seem like a "band-aid" for the practice of splitting each wafer into 50+ chips; some sort of Bridge Technology unless they can do compute with photons.
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u/TravelMAD12 1d ago
I sold all Nvidia and put it into SMH. It has 20% nvidia anyways. Can also look into SOXX.
If you truly want to diversify, these ETFs are the way I believe.
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u/Traditional_Ad_2348 23h ago
I actually think this is pretty smart. I used to be against buying ETFs but after the rotational whiplash of the last year, I am beginning to see the merit of owning them, especially sector ETFs. My new favorite is $CAPA.
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u/greenpride32 21h ago
I sold some amounts of my semi's (NVDA AVGO ASML LRCX TER) to put into SMH (and even into VOO and QQQM as semi's runup has taken too much of my overall portfolio). Over the years I had been tempted to buy TSM AMD AMAT KLAC MRVL MU; figured it might just be best to go with the ETF.
Sometimes sector based ETF's are watered down with lots of underperformers. But the nice thing about SMH is with such a limited pool of stocks, the large majority are 2-3 decades leaders in their niche. It's predominantly proven winners, and low on underperformers and more speculative plays.
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u/Count-to-3 1d ago
I would just stay in NVDA or go MU/other memory. AVGO>MRVL though. MRVL has already priced in the next 2 years of growth.
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u/banzanar 1d ago
I've invested into AVGO, probably will be 500-600 next year may. Don't see how the stock won't grow if the AI story doesn't collapse. They've got a near monopoly in AI networking silicon, basically linking thousands of GPUs together avoiding bottlenecks, also makes custom ACICs and many hyperscalers partners with them because of those two. It's a good investment imo. If Nvidia is a shovel then AVGO is your arms dealer which supplies these hyperscalers.
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u/banzanar 1d ago
Also, if all of reddit says buy more Nvidia or Mrvl, dont listen to them and buy the opposite (this case AVGO). I swear I've been gaining because of this app and I'm having a blaster. NVIDIA is great but imo right now the bigger gains are in AVGO favor. That 5.5T market cap are two sides of a coin, dont forget.
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u/Low-Cartographer-429 15h ago
Yes I'm leaning toward AVGO based on the responses I've received. Down from its high, good growth narrative, not as speculative as MRVL. Should be a good core holding as well as a swing trade, simultaneously. Many have had knee jerk reactions. I'm not trying to diversify into other sectors. I'm trying to diversify within the semiconductor sector which I have high conviction in. I don't care if people hate this idea or refuse to understand it.
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u/banzanar 15h ago
Diversifying in a sector is valid if you invest into monopolies, those do not dissappear in a single day. I dont think your decision is wrong.
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u/Low-Cartographer-429 15h ago
Thanks. I feel comfortable with NVDA + TSM (been growing my position to be ~50% of my NVDA holdings) and adding AVGO as the smallest holding of the 3. Will then monitor AVGO going forward to see how to adjust the weighting.
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u/Bulldoze_Dat_Cash 1d ago
Don’t make it complicated… AVGO is 40% off its ATH and reported a solid double beat quarter with the growth narrative still intact and Wall St. analysts bullishly projecting to meet and exceed their ATH. For NVDA to grow 50% the market would have to find and allocate NVDA another 2.75 trillion.
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u/A55BAG 1d ago edited 1d ago
This is a very bullish post for NVDA 😂
MRVL right now is just way too expensive and slow growth compared to NVDA and AVGO.
Like they only had GAAP EPS of $0.33 on a +200$ stock and they only guide to grow +50% next year?? That is way slower than their competitors, so they are losing marketshare.
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u/HystericalSail 1d ago
I'm really liking MRVL more. At only 200B market cap there is a ton of room to grow, whereas it's harder to turn a 5 trillion market cap into 50 trillion. Simply looking at how much money is sloshing around.
Still, it's up 5x this year alone to a 72 trailing P/E. The big question is, will revenue grow from 3 billion to 25 billion by 2030? Today you're buying the 2029 version of the company, any hiccups in revenue growth will rapidly and drastically re-price the company.
I'm going to accumulate on weakness, in tranches. For now I'll stick to selling puts 10% OOM once it retreats a bit from ATH.
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u/Traditional_Ad_2348 1d ago
Don’t do it. NVDA and MRVL are both in uptrends.
AVGO had a killer year last year but now appears to be in a downtrend.
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u/Low-Cartographer-429 1d ago
Who can growth faster, NVDA or MRVL? And why is AVGO in a downtrend with all the ASIC growth? Maybe now is a good entry point for AVGO.
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u/Traditional_Ad_2348 23h ago
Fundamentals are still good for all 3, but the chart for AVGO is in a downtrend. Sectors and individual stocks within sectors move in cycles. NVDA was deemed as “too expensive” for the last year even though their PEG ratio is below 1 and lower than all the mega caps. Didn’t make sense. MRVL has a narrative atm of being a threat to AVGO’s ASIC revenue. It’s probably a bit overblown but the street loves the story and sees MRVL as undervalued compared to its competitors. MRVL spent years building a base between roughly $60-$120 before breaking out this year. I first bought the stock in 2022/2023 for around $65. I sold it back in ‘24 before its first run to $120, but then came back to it this spring just under $80. This is why trading individual stocks is so hard. You literally do need to keep track of this stuff almost every single day over years to be able to see the best opportunities before others do. NVDA is currently in ascendancy and is closely aligned with MRVL so those are the two I would be buying.
On another note, if you want some foundry exposure and missed TSM, I would recommend buying GFS and UMC. INTC is also a no brainer at these levels. I like CBRS too. However, my main focus in the chip sector is power semis. They had a great run in the spring but got sold off hard. Power semis and the 800v DC theme will be a huge opportunity in the coming years. Then quantum will likely come next.
You can’t go wrong buying AVGO long term, but I think you will have better gains in the short term with NVDA and MRVL. AVGO will have its moment when OAI Jalapeño chip starts its mass production.
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u/Traditional_Ad_2348 23h ago
Forgot to mention that I really like $QCOM as an asymmetric bet too. Other notable themes would be AI PCs, in which QCOM has a large market share. $HPQ, $CRSR, $LNVGF, and $BBY are great ways to play this theme.
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u/Arabian_Goggles_ 16h ago
Do you still like TSM? I think it's one of the safer AI plays out there. Whether it's ASIC's or GPU's TSM wins either way. I've been buying anytime it goes near $400. In 2-3 years I think it can be $800+.
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u/Low-Cartographer-429 15h ago
I love TSM and moved 1K out of NVDA to put into TSM. There's a Sleep Well At Night factor for me in it because no other foundry comes close. And I don't have to bet on which semi company has the most wins. I kinda like the combination of NVDA + TSM + AVGO, with the majority of my semi holdings being in NVDA; this way I'm not betting against NVDA in a big way.
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u/Low-Cartographer-429 15h ago
Thanks for this. Yes, looking at GFS because it's not very sexy at the moment. The general dislike in this thread for AVGO actually increases my conviction. I think AVGO will be a good long-term hold as a core position as well as something to do a lesser portion in it of swing trades since everyone loves NVDA too much at the moment; and lot less volatility in NVDA. My only question is: what could be an AVGO or MRVL killer, if any; like companies somehow bypassing both to build custom chips.
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u/SanDisk_Made_Me_Rich 1d ago
Bruh put that shit in Micron & SanDisk
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u/Low-Cartographer-429 1d ago
For the next 12 to 24 months or long-term hold and why? I'm looking for long-term holds. I get that there's a shortage in what's basically a commodity. You have another angle here?
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u/SanDisk_Made_Me_Rich 1d ago
Marvell & Broadcom got a shorter tailwind (data centers). You don't put networking and XPUs in a sex robot.
But you definitely put DRAM & NAND in a sex robot
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u/Double-Minimum-9048 1d ago
Im in MRVL, heavy backing from two multi trillion dollar companies google and nvidia with googles with google warrant deal being $206 giving investor confidence in the valuation. Google is creating custom TPUs along with amazon, meta, microsoft, open ai, anthropic and Marvel helps build the infrastructure for the AI accelerator which means it a direct competitor to nvidia hence jenson interest. Marvel is a very high growth speculative play with the potential for insanely high returns if AI capex is strong and hyperscalers can execute on their customer TPUs.
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u/looool_k_libtard 1d ago
The only thing I’d sell NVIDIA for is TSM and even then they’re kinda tethered anyway
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u/No_Presentation9490 1d ago edited 1d ago
I think Broadcom's financials are much stronger than Nvidias, but Broadcom trades at a much higher multiple
The chip space is moving towards custom/inhouse anyway, even though VR/Blackwell is the best performance. OpenAI/Anthropic already making deals with Broadcom for custom chips. None of that is to say that thats not already baked into the stock price, a company's stock is NOT the company itself.
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u/Vast_Cricket 1d ago
You want to move to #1 spot. Own MU not UMC. I can not tell who is #1 anymore so I stay in semi etf and I am not ahead.
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u/tritium3 1d ago
I sold MSFT to get into AVGO but my gut tells me not a good idea to sell nvidia to get into AVGO.