Most investors know that names are fun Nvidia And Microsoft were the big winners of the first rise of artificial intelligence (AI). As time goes by, however, other companies are doing their best to fill the technology 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 is the first time many investors have even heard of these organizations.
Marvell technology (NASDAQ:MRVL) is not a name that many investors know. However, it is an equipment that the artificial intelligence industry is increasingly dependent on, as the company cannot continue to improve and grow without this organization’s technology.
Never heard of it? Most investors probably don’t. Its $100 billion market cap doesn’t attract much attention.
However, it’s not a stretch to suggest that Marvell Technology shares could soon deliver Nvidia-like gains. The products are so important for AI data centers.
No, there are no artificial intelligence processors being made, at least not the processors you hear so much about, like Nvidia’s Grace CPU (central processing unit), which currently serves as the workhorse for many AI data centers.
Instead, Marvell Technology makes a wide range of high-performance silicon that attaches (and connects) to all the servers that are tied together to form a wall of technology that resides in a data center. Digital signal processors (or DSPs), switches, Ethernet controllers, hard drive connectors, and custom ASIC chips intended to meet very specific needs with lower specifications are all in the wheelhouse. For example, Aquila’s recently unveiled digital signal processors can process 1.6 trillion bits of digital data per second.
Boring? Maybe a little. But don’t confuse boring with moving slowly. While the economic headwinds will keep this company’s revenue growth at a minimum this year, it should rebound in earnest next year. Analysts are calling for revenue growth of more than 40% by 2025.
That’s just the beginning. Technology market research firm IDC predicts that the current $32 billion AI infrastructure market is expected to grow to more than $100 billion annually over the next five years. Separately, but simultaneously, Straits Research believes the AI infrastructure sector will grow at an average annual rate of 20.7% through 2032. Marvell is expected to account for at least its fair share of this growth, boosting profits even faster than its predecessor. During this period, sales are likely to grow.
Convinced? Good. Just don’t be too quick to plow into this ticker. There is time and reason to wait before diving in.
In general, it is a bad idea to time the entries and exits of your trades perfectly as this often does more harm than good. The best time to buy quality stocks is usually when you have the money available. The right time to sell a stock is when it no longer offers sufficient returns relative to the risk, or when the underlying company no longer meets your needs.
However, there are occasional cases where it makes sense to give yourself an edge by being patient. This is one of those moments. Shares of Marvell Technology rose more than 200% from their 2023 lows, with half of those gains only coming midway through this year. That’s a tough act to follow.
Shares are also frothy valued at more than 70 times expected earnings per share of $1.56 for the current fiscal year. While they’re below the current analyst consensus price target of $120.88, around $113, they’re not exactly miles below that level.
Don’t be too stingy when it comes to playing the waiting game. Earnings are expected to rise nearly 80% to $2.76 per share next fiscal year, due to the reignited growth of the AI infrastructure market. This kind of impending growth rate could easily negate the drag of high prices.
This could help: While the stock is currently trading just slightly below the analyst consensus target, the vast majority of the analyst audience still rates Marvell Technology a Strong Buy.
Is there enough potential on the table to make you a millionaire with this stock?
Of course, this mainly depends on how much money you invest in the company. If you invest $1,000 in a share of Marvell today, you won’t break the seven-figure mark at any point in your life.
However, buying $100,000 worth of Marvell Technology stock today could be a different story. There’s certainly enough long-term potential here to turn this ticker into a ten-bagger in the foreseeable future. Once again, the artificial intelligence infrastructure market will triple in size over the next three years, and more than fivefold in the longer term, in line with the ever-growing demand for AI-powered solutions.
But whether Marvell Technology will ever make you a millionaire doesn’t matter. It’s a great growth prospect for any amount of money you can invest in it… if growth is your current priority, and if you can tolerate the above-average risk that it entails. Any significant dip from here is a buying opportunity.
Before you buy shares in Marvell Technology, consider the following:
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James Brumley has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Microsoft and Nvidia. The Motley Fool recommends Marvell Technology and recommends the following options: long calls in January 2026 for $395 at Microsoft and short calls in January 2026 for $405 at Microsoft. The Motley Fool has a disclosure policy.
Meet the Supercharged Growth Stocks That Could Make You a Millionaire, originally published by The Motley Fool
