Why Marvell Technology Leads in AI Stocks

Published Date : 8/10/2025 

With the surge in demand for artificial intelligence, Marvell Technology is emerging as a strong player in the data center infrastructure market, offering significant growth potential. 

Spending on data centers is exploding as the demand for artificial intelligence (AI) continues to heat up. Nvidia has been the top beneficiary so far, but investors can broaden their exposure to the growing demand for chips and other data center components by considering Marvell Technology (NASDAQ: MRVL).

Marvell Technology has been one of the fastest-growing semiconductor companies, with revenue surging 58% year over year in the last quarter. Despite this rapid growth, the stock still trades at a reasonable valuation, making it a solid option for investors interested in the AI opportunity.

Marvell Technology is a leader in key data center components, including custom chips and Ethernet connectivity. Data center revenue has more than doubled over the last three years and now comprises 75% of Marvell's business. This significant growth in data center revenue has lifted Marvell's margins. Strong revenue growth last quarter drove a significant increase in the company's adjusted operating margin.

Marvell recently sold off its automotive Ethernet business to redirect investment to its data center business. Management expects this move to drive further margin expansion and earnings growth. Analysts expect the company's earnings to grow at an annualized rate of 33%, yet the stock trades at a very reasonable 26 times next year's consensus earnings estimate. This growth could potentially double the stock's price in the next three years.

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Frequently Asked Questions (FAQS): 

Q: What is Marvell Technology known for?

A: Marvell Technology is known for its leadership in key data center components, including custom chips and Ethernet connectivity. The company has seen significant growth in data center revenue, which now comprises 75% of its business.

Q: How has Marvell Technology's revenue grown recently?

A: Marvell Technology's revenue grew 58% year over year in the last quarter, driven by strong demand for custom AI chips and connectivity components.

Q: What is the expected earnings growth for Marvell Technology?

A: Analysts expect Marvell Technology's earnings to grow at an annualized rate of 33% in the coming years.

Q: Why did Marvell Technology sell its automotive Ethernet business?

A: Marvell Technology sold its automotive Ethernet business to redirect investment to its data center business, aiming to drive further margin expansion and earnings growth.

Q: How is Marvell Technology's stock valuation compared to its growth potential?

A: Despite the strong growth, Marvell Technology's stock trades at a reasonable 26 times next year's consensus earnings estimate, making it a solid option for investors. 

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