Key Takeaways
- Artificial intelligence (AI) infrastructure stocks are expected to deliver solid growth in 2026, with market research firm Gartner estimating AI infrastructure spending to jump to almost $1.4 trillion this year.
- Marvell Technology is a lesser-known AI infrastructure company that is growing at an incredible pace due to its custom AI processors and networking and storage components.
- The company’s addressable market is expected to increase at a 35% CAGR through 2028, reaching $94 billion after three years.
- Marvell trades at an attractive 22 times forward earnings estimates, making it a promising investment opportunity.
- The company’s earnings are anticipated to increase by 80% in the current fiscal year, followed by healthy growth in the next couple of years.
Introduction to Marvell Technology
Marvell Technology is a semiconductor company that is growing at an incredible pace due to the increasing demand for artificial intelligence (AI) infrastructure. As Gartner estimates that AI infrastructure spending could jump to almost $1.4 trillion this year, up by 41% from last year’s levels, Marvell is well-positioned to capitalize on this trend. The company makes application-specific integrated circuits (ASICs), which are in high demand for use in AI data centers. According to Bloomberg, "the market for custom ASICs deployed in AI data centers could grow at a compound annual growth rate (CAGR) of 27% through 2033, generating $118 billion in revenue."
Growth Potential of Marvell Technology
Marvell’s growing share of custom AI processors is expected to drive outstanding growth for the company. As Bloomberg notes, Marvell is expected to control 20% to 25% of the custom AI processor market by the end of the forecast period, which would translate into annual revenue of $23.6 billion to $29.5 billion for the company. This is more than triple the revenue Marvell generated in the past year. As the company’s CEO notes, "Marvell’s relationships with Amazon and Microsoft for its custom AI processors would enable it to capture a nice chunk of this lucrative opportunity." Marvell’s custom AI processors are used by four of the top hyperscalers in the U.S., along with emerging hyperscalers, and the company estimates that it could expand those design wins to more than 50.
Market Opportunity and Competitive Advantage
Marvell’s addressable market is expected to increase at a 35% CAGR through 2028, reaching $94 billion after three years. The company’s networking and storage components, which are used in data centers, provide a competitive advantage and enable Marvell to capitalize on the growing demand for AI infrastructure. As Harsh Chauhan notes, "Marvell doesn’t just make custom AI processors; it also makes networking and storage components that go into data centers." This diversified product portfolio positions Marvell for long-term success and makes it an attractive investment opportunity.
Investment Opportunity and Valuation
Marvell trades at an attractive 22 times forward earnings estimates, which is a slight discount to the 26 multiple of the tech-laden Nasdaq-100 index. Considering that Marvell’s earnings are anticipated to increase by 80% in the current fiscal year, followed by healthy growth in the next couple of years, buying this stock is a promising investment opportunity. As Chauhan notes, "buying this stock is a no-brainer right now." With its strong growth potential, competitive advantage, and attractive valuation, Marvell Technology is a company that investors should consider adding to their portfolios.
Conclusion and Future Outlook
In conclusion, Marvell Technology is a lesser-known AI infrastructure company that is growing at an incredible pace due to its custom AI processors and networking and storage components. With its strong growth potential, competitive advantage, and attractive valuation, Marvell is a promising investment opportunity. As the demand for AI infrastructure continues to grow, Marvell is well-positioned to capitalize on this trend and deliver impressive gains for investors. As Gartner notes, "AI infrastructure spending could jump to almost $1.4 trillion this year," and Marvell is ready to take advantage of this opportunity. With its solid performance and growth potential, Marvell Technology is a stock that investors should keep an eye on in 2026.
https://www.fool.com/investing/2026/02/01/the-artificial-intelligence-ai-winner-hiding-in-pl/
