Marvell stock: Could MRVL be the next big thing in AI?

Marvell Technology Inc (NASDAQ: MRVL) is emerging as a major player in the artificial intelligence sector, according to Ivana Delevska, founder and chief investment officer of Spear Invest.

With shares of the semiconductor giant surging over 30% this month, Delevska remains highly optimistic about MRVL's potential as AI drives unprecedented growth in networking.

Marvell's commitment to expanding its product lineup and a modest 0.33% dividend yield make its stock particularly appealing, she noted in a recent Yahoo Finance interview.

Custom silicon chips

One significant factor driving Marvell's bullish outlook is the growing trend among hyperscalers to develop custom silicon chips, reducing their reliance on Nvidia.

This shift is expected to benefit Marvell significantly, as the company anticipates its revenue from custom-compute chips—essential for AI data centers—to grow at an annualized rate of 45%, reaching an impressive $43 billion by 2028.

However, Delevska cautions that while these custom chips hold promise, they are still in the early stages and may take until next year to substantially impact Marvell's growth.

Marvell Technology Q2 results

Marvell Technology is already seeing positive effects from the AI surge.

The company recently reported a narrower loss and exceeded revenue expectations for its second financial quarter.

CEO Matt Murphy highlighted the AI-driven boost, forecasting $1.45 billion in revenue for the current quarter, with adjusted per-share earnings of 40 cents.

This forecast surpasses analysts' expectations of $1.41 billion in revenue and 38 cents per share.

Murphy anticipates growth in enterprise networking and carrier markets, alongside accelerated data center market expansion.

Should you invest in MRVL?

Wall Street's sentiment toward Marvell stock remains positive, with analysts currently holding a consensus “buy” rating.

The average price target of $92 suggests a potential upside of approximately 25% from current levels.

This reflects confidence in Marvell's ability to leverage AI trends and deliver strong financial performance in the coming quarters.

Marvell Technology's strategic positioning in the AI sector, along with its promising revenue forecasts and positive analyst outlook, makes it a compelling investment opportunity as the company capitalizes on the growing demand for advanced networking solutions.