MaxLinear (MXL) is facing “supply constraints” as it looks to keep up with the demand from large cloud-infrastructure companies for its Keystone platform. This product helps connect GPU chips, which produce AI, to each other in data centers. With the cloud giants, also known as hyperscalers, launching many new, AI-oriented data centers, the demand for this offering is rising very quickly.
Largely as a result of this trend, MaxLinear provided second-quarter revenue guidance of $160 million to $170 million, well above the $137.2 million of sales that it generated in Q1. Moreover, last quarter, the revenue obtained by its infrastructure business, which includes Keystone, soared 136% versus the same period a year earlier. These superb numbers produced a 76% rally by MXL stock in the wake of the news.
More Top Stocks Daily: Go behind Wall Street’s hottest headlines with Barchart’s Active Investor newsletter.
Meanwhile, the company expects the demand for Keystone and its successor to continue growing rapidly going forward, while the hyperscalers are expected to keep rapidly building data centers for the foreseeable future. Multiple investment banks are very upbeat on MXL stock. Finally, the fears about the company's upcoming arbitration case appear to be overdone, and the shares' valuation is attractive, given the firm's expected, powerful, upcoming growth.
Given all of these points, MaxLinear may be the top AI infrastructure stock to buy now.
www.barchart.com About MaxLinear
The company specializes in providing integrated circuits that enable connectivity. It's based in California.I
n Q1, its revenue jumped 43% versus the same period a year earlier to $137.2 million, while its earnings per share came in at $0.22, versus a loss per share of $0.05 in Q1 of 2025.
The Powerful Demand for MaxLinear's Interconnects Look Poised to Continue Indefinitely
Speaking on the company's Q1 earnings call held on April 23, CEO Kishore Seendripu said that MXL expects the “momentum” of its infrastructure unit to accelerate “as hyperscalers rapidly scale AI-centric architectures.” Further, the CEO reported that the company's revenue from data centers is expected to continue growing quickly into 2027.
And, according to one estimate, compiled in January, the hyperscale data market will expand at a compound annual growth rate of 23.7% between 2026 and 2031, suggesting that MaxLinear's infrastructure business is poised to continue growing rapidly for many years to come.
Bullish Analysts and Overdone Fears
In the wake of MXL's Q1 report, investment bank Stifel raised its price target on the name to $49 from $34 and kept a “Buy” rating on the stock. One of the key reasons for Stifel's bullish stance was the strong demand for Keystone among a number of Maxlinear's larger customers.
Even more bullish was Roth/MKM, which upgraded the shares to “Buy” from “Neutral” and hiked its price target to $60 from $18. MaxLinear is well-positioned to benefit from the expansion of AI infrastructure, Roth believes.
www.barchart.com 
www.barchart.com But some on the Street are not very upbeat on MXL due to an arbitration case that MXL is facing. Its opponent in the case is Silicon Motion (SIMO), which MaxLinear decided not to acquire after agreeing to do so. Silicon Motion is asking for $160 million from MXL. But in my experience, litigation between companies is usually setlled for much less than the plaintiff initially seeks. Although MXL only had $61 million of cash at the end of last quarter, it may be able to pay some of its penalty, if any, to SIMO in MXL stock.
And because MaxLinear had a relatively low debt load of $151 million as of the end of Q1, it will likely be able to obtain a loan in order to pay SIMO if necessary.
Valuation and the Bottom Line on MXL Stock
The stock has an elevated forward price-earnings ratio of 62.9x. But analysts on average expect the company's earnings per share to soar 71% this year and 117.65% in 2027, making the shares quite cheap at this point.
On the date of publication, Larry Ramer did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
SMCI Stock Alert: 2 Red Flags and 1 Green Flag About Supermicro Where is the Most Diversified U.S. Stock Market Index Heading? Memory Supply Dynamics May Hurt Qualcomm’s Q2. Is QCOM Stock a Buy, Sell, or Hold? As OpenAI Drags Down Chip Stocks, Is Applied Materials Stock a Buy, Sell, or Hold?