We recently published a list of Top 10 AI Stocks on Wall Street’s Radar. In this article, we are going to take a look at where Marvell Technology, Inc. (NASDAQ:MRVL) stands against other AI stocks on Wall Street’s Radar.
As reported by Reuters, Wall Street’s main indexes rose on Monday to more than one-week highs, driven by a rally in semiconductor stocks and news suggesting that the incoming Trump administration could adopt a less aggressive tariff stance than previously anticipated.
READ ALSO: Top 10 AI Headlines Shaping Wall Street for 2025 and 10 AI Stocks Taking Wall Street by Storm
Microsoft has recently announced that it plans to invest $80 billion in AI-enabled data centers in fiscal 2025, suggesting how semiconductor demand is expected to remain strong this year. According to Citigroup, the company’s spending plan was a “modest positive” update as it removed the risk of a drop in capital expenditures.
Ever since OpenAI launched ChatGPT in 2022, investments in AI have surged drastically. Since AI requires drastic computing power, tech companies have been investing billions to enhance their AI infrastructures and broaden their data center networks. The race, however, isn’t just limited to the US. Efforts are being made to protect the country’s leadership in AI against the rest of the world, particularly China. China, in turn, has begun offering developing countries subsidized access to scarce chips, and it’s also promising to build local AI data centers. Moves like these could position the country as an AI leader in the future, something that the US is actively making efforts to avoid.
However, regardless of the capital expenditures companies are making toward AI, one analyst says that these are no longer going to be enough in 2025. David Dietze of Peapack Private Wealth Management said that a major theme for 2025 is going to be “Show Me The Money”. Dietze said that even though major companies have been investing billions in AI partnerships and similar initiatives, investors are soon going to be demanding proof of returns.
“Wall Street’s the type of place where it’s like, ‘Show me the money, like, yesterday…These investments and capital expenditures are great, but when does the cash flow start coming in? And right now many AI companies have gotten a pass on that, but I think increasingly Wall Street’s going to say, ‘No, we’ve seen the capital expenditures, you’ve got the AI label, but now we want to see the cash flows coming in from that. And that’s what we’re gonna be watching so carefully next year”.
– David Dietze, Peapack Private Wealth Management.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An assembly line in a semiconductor factory, with workers at their stations.
Marvell Technology, Inc. (NASDAQ:MRVL)
Number of Hedge Fund Holders: 70
Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers. On January 6th, Craig-Hallum analyst Christian Schwab raised the firm’s price target on Marvell Technology (NASDAQ:MRVL) to $149 from $132 and kept a “Buy” rating on the shares. According to the firm, Marvell is a “Top Idea heading into 2025” as it is a major beneficiary of the accelerating multi-year AI megatrend. In FY’24, AI revenue for Marvell Technology was $550M. It is now anticipated that the AI revenue will be significantly above the previous expectations of over $1.5B in FY’25. Craig-Hallum added that AI revenue for FY26 is also expected to be significantly above the previous expectations of $2.5 billion. The upward revision mirrors Marvell’s strong position in the AI market. Analysts from Bank of America have also been bullish on the stock, citing that the chipmaker “has transformed into a data center silicon leader,” with “growth opportunities across cloud data centers, 5G infrastructure, advanced autos, enterprise networking, and security markets”.
Overall, MRVL ranks 6th on our list of AI stocks on Wall Street’s Radar. While we acknowledge the potential of MRVL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MRVL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. This article is originally published at Insider Monkey.