Nvidia (NVDA) CEO Jensen Huang recently predicted that Marvell (MRVL) would become “the next trillion-dollar company,” sparking an intense rally by MRVL stock. With Marvell effectively exploiting the huge, rapidly increasing investments by tech giants building their own chips and MRVL growing at a blistering pace amid the AI boom, MRVL stock is worth buying for growth investors.
Other factors likely to boost MRVL stock are Nvidia's significant investment in the name and the Street's current enthusiasm for hardware makers that are benefiting a great deal from the AI Revolution.
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About Marvell Technology Stock
Based in Santa Clara, California, Marvell is a worldwide semiconductor firm that creates custom silicon and data center infrastructure products. The company delivers core technology for transmitting, processing, storing, and protecting data across enterprise networks, cloud platforms, and 5G systems.
Its offerings include custom application-specific integrated circuits, network switching chips, interconnect solutions, and optical infrastructure that power today's data centers and enterprise networks.
The company's market capitalization is $276 billion, while its forward price-earnings ratio is 95x.
www.barchart.com The Giants Are Investing in Chipmaking and Spending on Custom AI Chips Will Boom
Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOG) (GOOGL), and OpenAI are all making their own AI chips to an extent with help from outside firms, including Marvell which designs AI chips for Alphabet, Amazon, and Microsoft. And Marvell is benefiting from Anthropic's high utilization of Amazon's chips.
Custom-made AI chips are cheaper and more effective at executing large-scale AI training and inference than GPUs. Further, McKinsey, the prominent consulting firm, has stated that custom-made chips can be more effectively tailored for specific projects.
Given these points, it's unsurprising that the custom ASIC chip market is slated to expand at a very impressive compound annual growth rate of 44.6% between 2024 and 2033 to about $165 billion. Of course, this expected trend bodes very well for MRVL stock.
Moreover, after hearing remarks by Marvell CEO Matt Murphy recently, Tore Svanberg, an analyst at investment bank Stifel, hiked his price target on MRVL stock to $321 from $230. The analyst, who kept a “Buy” rating on the name, reportedly believes that the tech firm is well-positioned to benefit from the strong demand for AI chips.
Marvell Is Generating Strong Revenue Growth Amid the Custom-Chip Boom
In MRVL's fiscal first quarter, its revenue from data centers jumped 27% versus the same period a year earlier to $1.83 billion. In Marvell's fiscal 2026 that ended in January, its revenue from data centers soared 46% to $6.1 billion, while its revenue from custom silicon climbed 100% to $1.5 billion.
If Marvell obtains just a 20% share of the custom silicon sector, its annual revenue from such products alone can reach $10 billion to $11 billion by FY29.
Nvidia and the Market's Enthusiasm for AI Hardware Plays Can Boost MRVL
Nvidia has invested $2 billion in MRVL, so Huang has ample incentive to push his many high-spending customers to purchase large amounts of Marvell's offerings.
Meanwhile, the Street remains very enthusiastic about AI-hardware plays. Providing evidence for that assertion, the PHLX Semiconductor Index ($SOX) rose nearly 6% on June 2, and it advanced 56% in the last three months. Given these strong metrics and investors' continued, justified enthusiasm about AI, the sector's recent pullback in the wake of Broadcom's (AVGO) guidance miss should prove to be short-lived.
And MRVL stock itself is rated a 100% “Buy” by Barchart, which notes that its outlook ranks in the Top 1% of all short-term signal directions.
www.barchart.com On the date of publication, Larry Ramer had a position in: MRVL , AMZN , AMZU . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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