Most investors know that names like Nvidia and Microsoft were the big winners of the initial advent of artificial intelligence (AI). As time marches on, though, other companies are stepping up to fill the technological gaps exposed by the rise of AI computer processors and AI user interfaces (such as OpenAI's ChatGPT and Microsoft's Copilot). In some cases, it's the first time many investors are even hearing of these organizations.
Marvell Technology(NASDAQ: MRVL) is not a name many investors are familiar with. However, it's an outfit the artificial intelligence industry is increasingly depending on, since the business can't continue to improve and grow without this organization's tech.
Marvell Technology, up close and personal
Never heard of it? Most investors probably haven't. Its $100 billion market cap doesn't turn a lot of heads.
However, it's not a stretch to suggest that Marvell Technology stock could soon be delivering Nvidia-like gains. Its wares are that important to AI data centers.
No, it doesn't make artificial intelligence processors -- at least, not the ones you hear so much about, such as Nvidia's Grace CPU (central processing unit), which is currently serving as the workhorse for many AI data centers.
Rather, Marvell Technology makes a wide range of high-performance silicon that attaches to -- and connects -- all the servers you'll find tethered together to make a wall of tech found inside a data center. Digital signal processors (or DSPs), switches, ethernet controllers, hard drive connectors, and custom-built ASIC chips meant to meet very specific lower-spec needs are all in its wheelhouse. As an example, its recently unveiled Aquila digital signal processors can handle 1.6 trillion bits of digital data per second.
Boring? Perhaps a little. But don't mistake boring for slow-moving. While economic headwinds will keep this company's top-line growth to a minimum this year, it should rebound in earnest next year. Analysts are calling for revenue growth of more than 40% in 2025.
That's still just the beginning. Technology market research outfit IDC predicts that today's $32 billion AI infrastructure market is set to swell to over $100 billion annually within the next five years. Separately but simultaneously, Straits Research believes the AI infrastructure business is going to grow at an average annualized pace of 20.7% through 2032. Marvell is expected to capture at least its fair share of this growth, driving profits up at an even faster clip than its revenue is likely to grow at during this stretch.
The valuation/opinion math still works in newcomers' favor
Convinced? Good. Just don't be too quick to plow into this ticker. There's time and reason to wait before diving in.
Generally speaking, trying to perfectly time your trades' entries and exits is a bad idea, often doing more harm than good. The best time to buy a quality stock is usually when you have the money available to do so. The right time to sell a stock is when it no longer offers enough reward relative to its risk, or when the underlying company no longer meets your need.
There are occasional instances, however, when it makes sense to give yourself a bit of an edge by being patient. This is one of those times. Marvell Technology shares soared more than 200% from their 2023 low, with half of that gain materializing just since the middle of this year. That's a tough act to follow.
Shares are also valued frothily at more than 70 times the current fiscal year's projected per-share profits of $1.56. Although they're priced below analysts' current consensus price target of $120.88, at around $113, they're not exactly miles below that mark.
Just don't get too stingy if you're going to play the waiting game. Earnings are expected to soar nearly 80% to $2.76 per share next fiscal year on the heels of the AI infrastructure market's rekindled growth. This sort of impending growth pace can readily override the drag of being richly priced.
This might help: Even though the stock's currently trading just a tad under analysts' consensus target, the vast majority of the analyst crowd still rates Marvell Technology a strong buy.
A solid prospect for any growth-seeking investors
Is there enough potential on the table for this stock to turn you into a millionaire?
Obviously this is mostly a function of how much money you choose to invest in the company. Committing $1,000 to a stake in Marvell today won't get you to the seven-figure mark at any point in your lifetime.
Buying $100,000 worth of Marvell Technology shares today, however, could be a different story. There's certainly enough long-term potential here to turn this ticker into a ten-bagger within the foreseeable future. Again, the artificial intelligence infrastructure market is set to triple in size over the course of the coming three years, and more than quintuple in size longer-term, in step with ever-growing demand for AI-powered solutions.
But whether or not Marvell Technology ever makes you a millionaire is beside the point. It's a great growth prospect for any amount of money you might be able to invest in it... if growth is your current priority, and if you can stomach the above-average risk it brings to the table. Any decent-sized dip from here is a buying opportunity.
Should you invest $1,000 in Marvell Technology right now?
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends Marvell Technology and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
