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Marvell Rises: The Underdog Gaining Ground in the AI Chip Game

Marvell Technology (MRVL) is positioning itself as a viable alternative to Nvidia (NVDA) in the surging AI chip market.

Author

Evelio Silvera
December 06, 2024

Why It Matters:


Marvell Technology (MRVL) is positioning itself as a viable alternative to Nvidia (NVDA) in the surging AI chip market. Its recent earnings and client wins signal a potential shift in the AI processor landscape.

Zoom Out:


Marvell has turned a corner. After a year of underwhelming results, the chipmaker has delivered back-to-back earnings beats, driven by strong demand for its custom AI chips. This is no longer just about hope—it’s about execution.

While Nvidia dominates the AI hardware space, big tech giants like Alphabet (GOOGL), Amazon (AMZN), and Microsoft (MSFT) appear to be diversifying their supply chains. Marvell’s application-specific integrated circuits (ASICs) cater to this demand, setting the stage for significant growth.

Analysts are taking notice, with price targets climbing and AI-related revenue projections now exceeding $3.6 billion for FY26, far outpacing earlier estimates of $2.5 billion.

Key Points (Deep Dive):

  • Revenue Surge: AI and data center markets now account for 73% of Marvell’s sales, fueling an impressive 20% jump in share price to $115.50 post-earnings.

  • Valuation Gap: Marvell trades at a forward P/E of 41x—steeper than Nvidia’s 34x—but analysts argue its upside potential justifies the premium.

  • Leadership Stability: CEO Matt Murphy reaffirmed his commitment to Marvell amidst rumors of Intel (INTC) courting him, calming investor nerves.

Market Pulse:


"Marvell offers investors a unique, non-Nvidia, alternative to gain leverage to the AI/Data Center trade," notes Benchmark Research's Cody Acree, who raised his price target to $135.

The Bull’s Take:


Marvell is carving out a lucrative niche as demand for custom AI processors skyrockets. For investors seeking exposure to AI without chasing Nvidia's premium, MRVL offers an enticing opportunity.

Bottom Line: Marvell’s momentum suggests it’s no longer just a supporting player in the AI chip boom. With AI revenues soaring, now might be the time to add MRVL to your watchlist—or portfolio.