Marvell Stock: AI Growth Potential

Nvidia is set to release its quarterly results soon, but another chipmaker, Marvell, will also release results. Its potential makes it a worthwhile investment.

Investors are awaiting Nvidia's upcoming results for its fiscal 2026 first quarter, which will be released on May 28. Nvidia's chips power AI data centers, and demand for its GPUs has boosted its growth. There is a chance that the semiconductor stock could continue its rally after the report.

Marvell Technology will report its fiscal 2026 first-quarter results on May 29. The stock has decreased so far this year, but it could increase after its quarterly report. Marvell Technology has guided for $1.88 billion in revenue for fiscal Q1 along with non-GAAP earnings of $0.61 per share. Those numbers would be an improvement over the year-ago period when the company reported adjusted earnings of $0.24 per share on revenue of $1.16 billion.

This growth is expected to be driven by demand for the company's custom AI processors and networking chips. Amazon, Google, and Microsoft use Marvell's custom AI processors to power their AI data centers. Marvell management noted stronger-than-expected demand from its AI customers during the company's March earnings conference call. These cloud companies are strengthening their relationships with the chipmaker and are 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. Marvell's AI revenue in the previous fiscal year was above its target of $1.5 billion. The company expects to significantly exceed its $2.5 billion target in fiscal 2026. Marvell is looking to gain more share of the custom AI chip market from Broadcom through its product development moves and partnerships.

Marvell revealed a 2-nanometer (nm) custom chip architecture in March of this year, which will improve upon the 3nm platform the company is using to build its chips. Moving 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 also announced that it is partnering with Nvidia to use the latter's NVLink Fusion platform. This platform will allow chip manufacturers such as Marvell to build custom AI processors that can work with Nvidia's GPUs. This partnership could help Marvell make gains in the custom AI silicon market, which it expects to grow at a compound annual rate of 45% through 2028.

Marvell is poised to deliver results along with guidance when it releases its quarterly report on May 29. That could help the stock recover from 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 beneficial. Assuming Marvell hits this mark at the end of the current fiscal year and trades in line with the Nasdaq-100 index's earnings multiple of 31 after a year, its stock price could jump to $87, a 45% increase. The 12-month price target of $97, as per 38 analysts covering this AI stock, points toward gains, giving investors another reason to buy Marvell Technology, since its upcoming report could trigger an upswing.