We recently compiled a list of the 15 Buzzing AI Stocks Making Headlines. In this article, we are going to take a look at where Marvell Technology, Inc. (NASDAQ:MRVL) stands against the other buzzing AI stocks.
Power needs for artificial intelligence and cloud computing are expanding so rapidly that some data center campuses may use more electricity than entire cities, or even states, CNBC reports. Here is what Ali Fenn, president of Lancium, a company that secures land and power for data centers had to say about technology companies:
“Technology companies are in a “race of a lifetime to global dominance” in artificial intelligence. It’s frankly about national security and economic security. They’re going to keep spending because there’s no more profitable place to deploy capital”.
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As such, it is important to note that renewable energy isn’t going to be enough to meet their power needs. According to developers, natural gas will also have to play a role. In turn, this need will slow down the progress towards meeting carbon dioxide emission targets. Nat Sahlstrom, chief energy officer at Tract, a Denver-based company that secures land, infrastructure, and power resources for such facilities, further reveals how data center companies have already begun operating at a scale where they have started “tapping out against the existing utility infrastructure”.
In other news, Uber is reportedly building a fleet of gig workers for labeling data for AI models. The new data labeling division, known as Scaled Solutions, will have workers complete projects for the company’s internal business units as well as serve outside customers, including self-driving vehicle company Aurora Innovation and video game developer Niantic, according to a report from Bloomberg. The ride-hailing company has started recruiting contractors in countries including the U.S., Canada, and India, among others.
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) is a fabless chipmaker that supports AI-optimized data centers through AI compute programs, interconnect switching, and storage solutions. On November 26, Oppenheimer analyst Rick Shafer raised the price target on Marvell Technology, Inc. (NASDAQ:MRVL) to $110.00 from $90.00 and maintained an “Outperform” rating. Oppenheimer expects strong results for the current quarter and guidance for the next, driven by growth in custom computes and networking/optics. It also stated that CSP/hyperscale AI builds remain early innings.
“MRVL reports Tuesday (12/3). We see upside to F3Q (Oct) print and F4Q (Jan) guide led by custom compute and networking/optics. CSP/hyperscale AI builds remain early innings. AI-related on track to surpass mgmt sales targets of $1.5B/$2.5B in CY24/CY25. Conversations reveal investors modeling $2B AI ASIC next year. We see MRVL’s four projects (Trainium, Inferentia, Axion, and Maia) potentially supporting revenues 2x that. Trainium alone could approach $2B, in our view. Trainium/Axion now ramping, Inferentia next year, Maia as early as 4Q25. 1.6T PAM4 DSP ramping, contribution $10Ms in F4Q; 1.6T/800G cross-over likely 1H CY26. We see 51.2T TL10 (ToR switch) sales also $10Ms in F4Q. Non-DC segments (carrier, enterprise, storage) expected to broadly improve, driving additional upside. We see GM 60%+/- long-term. MRVL’s structural growth, led by cloud DC AI, accelerating into CY25. We reiterate our Outperform rating. New target $110 (prior $90)”.
Overall MRVL ranks 6th on our list of the buzzing AI stocks that are making headlines. 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 timeframe. 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.
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Disclosure: None. This article is originally published at Insider Monkey.