Marvell Stock Forecast Boosted as Market Swings Back to AI
The semiconductor firm has a major partnership with Amazon Web Services, positioning it at the top of the AI chip market.
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Move over, Skynet; Willow has entered the chat.
This week, Alphabet's GOOGL announcement of its Willow quantum chip sent shockwaves through the computing world. The reactions on social media were wildly entertaining. Ironically, I witnessed more fear of what chaos quantum computing could cause than I did worries about artificial intelligence causing the fall of humanity.
The news stole the spotlight from AI. How long that lasts is the big question, but unlike AI, practical applications of quantum computing are still a distant thought. If market players pull back on the recent AI frothiness, there may be an opportunity to enter positions that could benefit from AI in 2025.
One name near the top of my list is Marvell Technologies MRVL.
Recently, Marvell reported Q3 FY2025 earnings per share of $0.43 and revenue of $1.52 billion, crushing Wall Street expectations. That's a sequential gain of 19%, fueled by a booming demand for its custom AI semiconductors and cloud infrastructure offerings.
The headline grabber was Marvell’s partnership with Amazon Web Services (AWS). The five-year deal as a next-gen data center semiconductor supplier positions Marvell as a top player in the custom AI chip market. I don’t have to tell anyone that AWS is a major player in the cloud computing, cloud storage and AI-compute industry.
After a strong post-earnings pop, Marvell has given back most of its move. The stock touched just under $120 the day after it reported earnings. It had closed under $100 before the announcement but struggled to stay in the green.
On Tuesday, shares hit a low of $105 before a small rally bumped it to $106.68 on the close. We still have the potential of a gap fill, which would push shares back to $98; however, the 10-day exponential moving average (EMA) could hold here.
I would consider starting a position here and adding down to $100. If the stock closes below $95, then I would stop out of the trade and admit the path of least resistance is much lower.
Buyers will find resistance around $112.50, so I would use that area to take a portion of the trade-off of the board for a small profit. However, I believe MRVL could trend much higher when the market swings back around to AI, and I don’t think we’ll have to wait long for that to happen.
At the time of publication, Byrne had no positions in any securities mentioned.
