We recently published a list of 9 Buzzing AI Stocks to Watch on Latest News. In this article, we are going to take a look at where Marvell Tech Inc (NASDAQ:MRVL) stands against other buzzing AI stocks to watch on latest news.
Doug Clinton, Intelligent Alpha founder, talked recently about the issue of scaling in AI on CNBC and said that in the past the improvement of AI models was surging based on the data inputs. However, Clinton referred to the recent reports of AI models hitting a plateau in performance. He believes this issue will be important for AI investors in the coming months and years.
“Just to give the quick 101: Over the last few years, what we’ve seen in AI model development is that the more data you put into these models and the more compute you use to train them, the better the models get—very predictable. However, recent reports from OpenAI and Google show that the latest models they’ve trained haven’t been as good as expected based on scaling laws. This has sparked debate in Silicon Valley. Even Sam Altman tweeted about it last week, saying, “There is no wall,” so maybe it’s not an issue—we’ll see. But I think Jensen really needs to address that question because the 18 to 24-month picture hinges on whether these companies will need to invest in something beyond just compute.”
However, the analyst is bullish on the broader AI market in the long term and believes companies are just getting started in this bull market.
“I think if you take a longer-term view—2 to 4 years—we’re still very confident we’ll be in an AI bull market. That doesn’t mean there won’t be pullbacks here and there, but I think we have a long way to go. Companies are really just starting to adopt AI, and we’ll begin to see those revenues over the next year and beyond.”
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For this article we picked 10 AI stocks trending on latest news and analyst ratings. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An assembly line in a semiconductor factory, with workers at their stations.
Marvell Tech Inc (NASDAQ:MRVL)
Number of Hedge Fund Investors: 74
Tony Wang, T. Rowe Price portfolio manager, explained his bull case thesis on Marvell Tech Inc (NASDAQ:MRVL) during a program on CNBC:
“I think Marvel’s, you know, I like that company long term. Right now, they are gaining a lot of traction in their custom chip products, specifically with Amazon. As these workloads become really big and these hyperscale players are spending a lot of capex, naturally, workloads are going to mature, and part of those AI workloads will shift to custom and in-house solutions. So, I do think there’s a really strong future for Marvel. In addition, they have strong networking chips, and the rest of their semiconductor business is probably bottoming out here. I like the company long term, and Matt Murphy, the CEO there, has done a really nice job.”
Wall Street analysts are bullish on Marvell Technology Inc (NASDAQ:MRVL) because the company’s products are used in key products sold by major companies. Its 1.6T optical DSP is used in Nvidia’s (NVDA) Blackwell GPU platform while AI ASICS are used in Amazon’s (AMZN) Trainium 2 AI processor and Google’s (GOOG)(GOOGL) Axion CPU processor.
Artisan Mid Cap Fund stated the following regarding Marvell Technology, Inc. (NASDAQ:MRVL) in its Q2 2024 investor letter:
“During the quarter, we initiated new GardenSM positions in CCC Intelligent Solutions, Marvell Technology, Inc. (NASDAQ:MRVL) and Insmed. Marvell Technology is a semiconductor company offering networking, secure data processing and storage solutions to customers worldwide. We believe Marvell has among the broadest range of intellectual property in technological areas (e.g., high-bandwidth data switching and storage applications) that position it well for the growing requirements of data centers, wireless networks and autos. Several of the company’s product lines (e.g., custom silicon, optical connectivity and switching) are benefiting from the growth of AI data centers. And we believe a significant opportunity exists for the company to help design and manufacture cost-effective custom data center chips that would help cloud providers reduce their reliance on expensive graphics processing units (GPUs). Furthermore, like many other semiconductor companies, a portion of its business may be poised for a cyclical recovery after the industry’s recent inventory correction.”
Overall, MRVL ranks 8th on our list of buzzing AI stocks to watch on latest news. While we acknowledge the potential of MRVL, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRVL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
