Business · Economy 51
Microsoft posts its fiscal first-quarter results on Oct. 28, and the other big cloud and internet companies usually report about the same time. For chip investors, the figure to watch is arguably capital spending -- how much every company plans to put into data centers and other big projects. This year, these plans keep growing.
Alphabet boosted its 2026 capital spending outlook in July to $195 billion to $205 billion, and Amazon upped its estimate to around $220 billion from $200 billion. Meta Platforms now expects $130 billion to $145 billion, almost twice the $72 billion it spent in 2025. Microsoft expects around $175 billion for calendar 2026.
That takes the four companies' combined plans over $700 billion this year. Nvidia ( NVDA -1.84% ) , Broadcom ( AVGO -0.56% ) , and Marvell Technology ( MRVL -1.65% ) each sell a different part of the build-out. And all three stocks are under their record closes as I write, which I think makes this a good time to buy.
Image source: Getty Images. Nvidia sells the full systems that train and run artificial intelligence (AI) models -- its graphics processing units (GPUs) , plus the processors and networking gear that connect them. The biggest cloud and consumer internet companies, which Nvidia calls hyperscale customers, made up around half its $96.2 billion in revenue in the fiscal second quarter of 2027 (the period ended July 26, 2026).
Demand is still speeding up. Nvidia's data center revenue climbed 117% year over year to $89.0 billion in fiscal Q2, up from 92% growth in fiscal Q1. Additionally, management forecast about $108 billion in revenue in fiscal Q3, almost $12 billion more than the company brought in the quarter before.
But shares cost only about 14 times earnings , using analysts' consensus for fiscal 2028 (the year ending January 2028). The stock trades near $229 as of this writing, less than 5% below its Oct. 6 record close. NVDA Nvidia $217.23 -$4.07 (-1.84%) NASDAQ · As of 4:00 PM ET 10/15/26 2.
Broadcom: chips made for one customer Broadcom takes another path into the same budgets. It helps big tech firms design their own AI chips, like Alphabet's tensor processing units (TPUs) and Meta's MTIA accelerators, and it sells the Ethernet switches that link them. Showing how big this business has gotten, Broadcom's AI semiconductor revenue grew 221% year over year to $16.7 billion in the fiscal third quarter of 2026 (the period ended Aug. 2).
AI chips now account for 56% of total revenue , versus 49% a quarter earlier, and custom chips made up 73% of that AI revenue. Management expects fiscal Q4 AI revenue of $21.7 billion, up 236%. Plus, Broadcom sells to big spenders that don't use its custom chips.
Charlie Kawwas, who heads Broadcom's semiconductor business, said on the September earnings call that even those cloud giants use its Tomahawk 6 switches. Still, the stock trades near $357 as I write, about 26% under its June 2 record close. Shares sell for about 19 times earnings, using analysts' consensus for fiscal 2027.
AVGO Broadcom $344.33 -$1.92 (-0.56%) NASDAQ · As of 4:00 PM ET 10/15/26 3. Marvell: the links between the chips Marvell is the smallest of the three. It sells optical digital signal processors (chips in the modules that carry data between AI servers over fiber), plus switches and custom chips for cloud giants.
Data centers made up 79% of Marvell's revenue in the fiscal second quarter of 2027 (the period ended Aug. 1), and that business is accelerating. Data center revenue climbed 27% year over year in fiscal Q1, then 46% in fiscal Q2. Management guided for about 75% growth in fiscal Q3.
Marvell's stock, though, already prices in much of that. Shares trade near $269 as I write, about three times where they started 2026 but 15% under their June 4 record close. At that price, the stock costs about 37 times earnings, using analysts' consensus for fiscal 2028, or about double Broadcom's price-to-earnings ratio.
MRVL Marvell Technology $241.24 -$4.04 (-1.65%) NASDAQ · As of 4:00 PM ET 10/15/26 Which one would I buy first? I think all three stocks are worth buying going into these reports. But Nvidia is the one I'd consider buying first, because it's the cheapest of the bunch and its data center growth is still speeding up.
Broadcom has the fastest-growing AI business of the three. And Marvell's growth is accelerating, too. But at its price, Marvell is the one I'd buy gradually.
Yes, all three depend heavily on the same big spenders, and plans that flatten in late October might drive each stock down. But so far this year, these buyers have mostly lifted their plans.
Source: The Motley Fool
