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Marvell Technology: A Bull Case Theory

In this article, we’ll summarize a bullish thesis posted on VIC regarding Marvell Technologies in late July when MRVL stock was trading at $63.44. Currently, MRVL stock is trading at $92.78, which is near its 52-week high of $95. So, MRVL stock has gained over 46% since the publication of this thesis. MRVL stock’s forward PE ratio is at 37 and the stock is trading at 15 times trailing twelve-month (TTM) sales.

With a focus on proprietary AI chips and its robust positioning in the AI and data center semiconductor space, the VIC thesis on Marvell Technology (MRVL) from July 2024 underscores a bullish outlook. According to the thesis, Marvell’s relationships with large hyperscalers such as Amazon, Microsoft, and Google position the firm as one of the leading players in developing advanced AI-driven semiconductors. In managing certain workloads, these chips have proven mission critical as Moore’s Law limits additional size cuts in conventional processors. Marvell will likely gain from the growing need for customized chips by these big IT businesses to keep its competitive advantage.

Designed for different hyperscalers, Marvell’s custom ASIC (application-specific integrated circuits) company is expected to scale greatly in 2025 and 2026. AI-specific chips with potential contributions ranging from $3 to $4 in EPS by 2026; this expansion is predicted to propel significant EPS growth, effectively highlighting Marvell’s evolving role as a premium AI chip supplier. Furthermore, Marvell’s leadership in high-end optical DSPs (digital signal processors), vital for data center connectivity, adds to its position in AI-related development sectors. Growing bandwidth needs for artificial intelligence (AI) are expected to drive the expansion of this DSP market; Marvell is positioned to take a major share in this market.

With forecasts of consistent growth through 2025, Marvell is positioned to offer healthy bottom-line growth with a great balance of AI and non-AI businesses. The thesis finally argues that Marvell’s varied growth engines, notable EPS potential from bespoke ASICs, and its relationships with hyperscalers make it an appealing investment with a good long-term horizon.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

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Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

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Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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