Marvell Technology is gaining momentum as investors look for cheaper alternatives to Nvidia’s high-priced AI stocks. Despite strong Q3 results, Nvidia’s stock has retreated due to concerns about its growth rate. Meanwhile, Marvell’s data center business, driven by custom AI processors and optical networking equipment, is expected to lift the company’s growth.
Marvell’s fiscal 2025 third-quarter revenue increased 7% year-over-year to $1.52 billion, beating consensus expectations. The chipmaker’s non-GAAP earnings rose to $0.43 per share from $0.41 in the year-ago period. Marvell’s data center segment produced 73% of its top line last quarter, up from 39% in the same period last year.
Analysts expect Marvell’s AI-related business to continue growing, with potential revenue of $3 billion next year. This growth is driven by the company’s custom AI processors and optical networking equipment, which are being used by major cloud computing providers. According to Reuters, the market for custom AI chips could be worth $45 billion by 2028.
Marvell management believes it will “significantly exceed” its full-year AI revenue target of $1.5 billion. The company is forecasting $2.5 billion in AI chip sales next fiscal year and up to $3 billion in AI-focused revenue. If Marvell achieves this growth, its market capitalization could hit $120 billion, representing a 43% increase from current levels.
With analysts expecting stronger growth in fiscal 2026, Marvell’s stock price is likely to rise. Investors who miss out on this opportunity may regret it, as seen with past “Double Down” stock recommendations for Nvidia, Apple, and Netflix, which yielded significant returns.
Source: https://finance.yahoo.com/news/missed-nvidia-buy-magnificent-artificial-124500050.html