Nvidia NVDA held its GPU Technology conference yesterday and could start boosting market sentiment for advancements in artificial intelligence (AI) again. Outside of Nvidia, one stock that investors will certainly want to pay attention to in regards to the AI revolution is Marvell Technology MRVL which sports a Zacks Rank #1 (Strong Buy) and lands the Bull of the Day.

Thanks to its AI offerings, Marvell Tech is still one of the more appealing growth stocks to consider. Furthermore, now may be an ideal time to buy MRVL after what appears to be a “healthy correction” in recent weeks.  

Marvell Technology’s AI Applications

Based in Wilmington Delaware, Marvell Tech is a key player in the AI landscape, providing advanced semiconductor solutions for data infrastructure. The company’s AI offerings include custom AI chips, connectivity solutions, and data center innovations, which are crucial to handling the demands of AI applications.

1.  Custom AI ASICs: Marvell develops application-specific integrated circuits (ASICs) tailored for AI and machine learning tasks. These are used in data centers and automotive AI systems, offering high performance and reliability.

2.  Accelerated Infrastructure: Marvell provides semiconductor solutions that enhance computing, connectivity, and storage infrastructure, which are essential for AI applications.

 3. AI Connectivity: Marvell Tech focuses on technologies like optical interconnects and high-bandwidth memory interfaces to support the massive data demands of AI systems.

The Leveling of Marvell Technology’s Valuation

The broader market selloff has created better buying opportunities in recent weeks and Marvell Tech certainly stands out in this regard.

There is no doubt that the hype for Marvell Tech’s stock is there with MRVL hitting 52-week peaks of $127 a share just two months ago. However, in the aftermath of a 10% correction among the tech-centric Nasdaq, MRVL trades just under $70 and at a much more reasonable 25.6X forward earnings multiple. This compares to a one-year high of 151.4X over the last year and a 12-month median of 95.6X.

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Rising EPS Estimates Offer Support

Supporting Marvell Tech’s more reasonable P/E valuation and suggesting its stock could start to rebound is the trend of positive earnings estimate revisions.

Driven by its AI initiatives, Marvell Tech’s annual earnings are expected to soar 75% in its current fiscal 2026 to $2.75 a share, versus EPS of $1.57 in FY25. Plus, FY27 EPS is projected to spike another 28% to $3.52.

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Most importantly to the assumption of more upside in MRVL and investor sentiment, EPS estimates for FY26 and FY27 are slightly up in the last month and have now risen over 2% and 1% in the last 60 days respectively.

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Bottom Line

Expecting double-digit top line growth for the foreseeable future as well, Marvell Tech’s annual sales projections are edging toward $10 billion by FY27. This stellar expansion will likely lead to the rush into MRVL shares again. That said, now may be the time to buy MRVL considering Marvell Tech’s more reasonable valuation. 

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This article originally published on Zacks Investment Research (zacks.com).

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