Marvell Technology (MRVL) is poised to capitalize on the surging demand for data center infrastructure driven by artificial intelligence (AI). Last year, hyperscalers invested $410 billion in capital expenditures, with projections indicating further growth. Marvell’s data center revenue rose 21% year over year last quarter, and management anticipates this growth rate will double in 2026, potentially positioning the stock for a 50% increase within the next year.

The company reported a remarkable 42% revenue growth for fiscal 2026, reaching $8.2 billion, with data center demand accounting for approximately 75% of total revenue. Adjusted earnings per share soared 81% to $2.84, and expectations for fiscal 2027 predict revenue of $11 billion, reflecting over 30% growth. Notably, data center revenue is projected to accelerate to 40% this year, driven by high-margin products.

Given its current valuation, trading at 24 times this year’s earnings estimate, Marvell may be undervalued, especially with a potential upside of 41% to $130 per share. This makes Marvell an attractive option for investors looking to leverage the ongoing AI infrastructure boom.

Source: fool.com