AI Stock Ready to Soar After May 29

Nvidia is set to release its quarterly results soon, but Marvell, another fast-growing chipmaker, will also release results soon. Its potential upside makes it a compelling buy.

Investors are looking forward to Nvidia's results for the first quarter of fiscal year 2026, which will be released on May 28. Nvidia is a major player in the AI chip market, powering AI data centers globally. Demand for its GPUs has driven remarkable growth.

Marvell Technology will report its fiscal 2026 first-quarter results on May 29. The stock has decreased this year, but it could increase after its quarterly report. Marvell Technology has guided for $1.88 billion in revenue for fiscal Q1 and non-GAAP earnings of $0.61 per share. This would be an improvement over the previous year's adjusted earnings of $0.24 per share on revenue of $1.16 billion. This growth is due to demand for its custom AI processors and networking chips.

Marvell's custom AI processors are used by Amazon, Google, and Microsoft to power their AI data centers. Marvell management noted stronger-than-expected demand from AI customers. These cloud companies are strengthening relationships with the chipmaker and working with Marvell on deploying its next-generation custom AI silicon. Marvell anticipates its custom AI chip revenue to increase in fiscal 2026 and beyond. Its AI revenue in the previous fiscal year was above its $1.5 billion target. The company expects to significantly exceed its $2.5 billion target in fiscal 2026 and is looking to win more of the custom AI chip market from Broadcom through product development and partnerships.

Marvell revealed a 2-nanometer (nm) custom chip architecture in March, an improvement over the 3nm platform. The move to a smaller process node should allow Marvell to pack more transistors into a smaller area, making the chips more powerful and power-efficient. Marvell is partnering with Nvidia to use the NVLink Fusion platform. This platform will allow third-party chip manufacturers such as Marvell to build custom AI processors that can work with Nvidia's GPUs. This partnership could help Marvell make a bigger impact in the custom AI silicon market, which it expects to grow at a compound annual rate of 45% through 2028.

Marvell seems poised to deliver solid results and guidance when it releases its quarterly report on May 29. That could help the stock after a 45% drop so far in 2025. Marvell's pullback this year is why it is trading at 22 times earnings. For a company whose earnings are predicted to jump by 77% in the current fiscal year to $2.79 per share, buying Marvell at this valuation may be compelling. If Marvell hits this mark and trades in line with the Nasdaq-100 index's earnings multiple of 31, its stock price could jump to $87, a 45% increase from current levels. The 12-month price target of $97, as per 38 analysts, points toward stronger gains.