We recently compiled a list of the 10 Hot AI Stocks to Buy Now. In this article, we are going to take a look at where Marvell Technology, Inc. (NASDAQ:MRVL) stands against the other hot AI stocks.
A disruptive breakthrough by a Chinese tech startup in January 2025 has shaken the artificial intelligence (AI) market to its core, triggering a sharp sell-off among tech stocks and compelling investors to rethink their exposure to expensive semiconductors and large hardware providers. In just a few days, this innovative AI model demonstrated performance on par with established Western systems while operating at a fraction of the cost, upending the long-held belief that cutting-edge artificial intelligence must be built on enormous capital outlays and massive computing infrastructures.
This unexpected development has exposed vulnerabilities in sectors that have relied heavily on high-cost hardware, sending ripples through investment strategies and forcing market participants to rapidly reexamine the economics of AI. With the rapid emergence of more cost-efficient, scalable models, investors are now witnessing a fundamental shift where technological efficiency and operational agility are beginning to outweigh the premium previously demanded for state-of-the-art AI performance.
This shift is compelling companies across the AI landscape to accelerate innovation and streamline operations as they adapt to a new era defined by lower training costs and more efficient architectures. Although regulatory and national security concerns continue to loom large – particularly regarding data privacy and the geopolitical implications of relying on foreign-developed technologies – the promise of significantly reduced capital expenditures is reshaping the competitive dynamics of the sector. The advent of these efficient, cost-effective models forces large hardware providers and entrenched tech giants to reevaluate their strategies, while simultaneously opening the door to a broader array of investment opportunities that are less dependent on massive budgets and intensive computing resources. For investors, the rapid evolution toward these scalable solutions presents an opportunity to capture long-term value in a market that is becoming increasingly competitive and diversified, as the traditional paradigms of AI development give way to more sustainable and innovative approaches. With this, we will take a look at some hot stocks to buy in the AI sector.
Our Methodology
We shortlisted 10 names with large exposure to the AI megatrend according to ETF databases. We ranked the names by the magnitude of positive revision in 2026 EPS estimates in the last twelve months from Wall Street analyst consensus (street). Our belief is that significant upward revision in EPS estimates from leading analysts serves as confirmation that companies are genuinely benefiting from the AI-related tailwinds and are well-positioned to capitalize on future growth opportunities driven by these advancements. For all the companies mentioned we also include the number of hedge funds that own it.
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 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
An assembly line in a semiconductor factory, with workers at their stations.
Marvell Technology, Inc. (NASDAQ:MRVL)
Magnitude of revision in street 2026 EPS estimates: +8%
Number of Hedge Fund Holders: 70
Marvell Technology, Inc. (NASDAQ:MRVL) is the second-biggest fabless chip designer focused on chips for wired networking. The company has a wide range of customers, including those in data centers, telecommunications, businesses, automotive, and consumer products, and its product lineup includes processors, transceivers, switches, and storage controllers. Recent market disruptions driven by low-cost, efficient AI models are shaking up the tech sector, and this has mixed implications for Marvell Technology, Inc. (NASDAQ:MRVL). On one hand, the trend toward more affordable and scalable technology may pressure hardware costs and margins in the networking space. On the other hand, as the industry shifts away from high-capex systems, companies that can deliver reliable and cost-effective networking solutions stand to benefit.
For investors, while the new market dynamics bring challenges, Marvell Technology, Inc. (NASDAQ:MRVL)’s ability to innovate and adapt keeps it an attractive long-term investment within the evolving AI landscape. Despite the aforementioned challenges, the analyst consensus has revised upwards the future earnings potential of the company, as management expects its custom silicon revenue to grow significantly, from sub-$1 billion currently to around $8 billion by 2028, targeting a 20% market share of the $40 billion TAM it has identified. The company’s strong momentum in custom silicon is demonstrated by ongoing production shipments to all hyperscalers and a new large 5-year agreement with Amazon covering custom AI silicon, networking, and other technologies. Marvell Technology, Inc. (NASDAQ:MRVL)’s diversified product portfolio, including in emerging areas like active electrical cables and interconnect technologies, also positions it for continued strong growth across its business segments. The California-based company is one of the hot stocks in the AI sector.
Overall MRVL ranks 10th on our list of the hot AI stocks to buy now. While we acknowledge the potential of MRVL as an investment, our conviction lies in the belief that 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.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
