Citi Says These 2 AI Infrastructure Framework Stocks Are Top Picks for 2025

As artificial intelligence (AI) continues to revolutionize industries, the demand for AI infrastructure is surging. Citi, a leading global financial services firm, has identified two AI infrastructure stocks as top picks for 2025: Dell Technologies (DELL) and Marvell Technology (MRVL). Both companies are well-positioned to capitalize on the growing demand for AI infrastructure, offering investors attractive opportunities in the burgeoning AI market.

Dell Technologies, a major player in helping companies modernize their information technology infrastructure, is poised to deliver excellent returns in 2025 and beyond. The company's infrastructure solutions group, including server sales, makes up roughly half of its business and posted a revenue increase of 38% year over year in Q2 2024. Management said it shipped $3.1 billion worth of AI servers in Q2, with an expanding pipeline that is multiples of its $3.8 billion backlog. Surging demand for AI infrastructure solutions should also benefit Dell's margins and earnings. The Wall Street consensus has Dell's earnings nearly doubling to $10.77 by fiscal 2027. If the stock's P/E moves up to around 20, the stock could potentially reach $215 within the next year or so, representing upside of 57% over the current share price of $137.



Marvell Technology, a leading semiconductor company, is also well-positioned to benefit from the growing investment in AI infrastructure. The stock recently reached new highs and is up 55% year to date. Revenue from the data center business nearly doubled year over year to $881 million in Q2, driven by strong demand for Marvell's electro-optics custom silicon, storage, and networking switch products. By the time Marvell's business is firing on all cylinders, the stock will be trading much higher. Management said its enterprise networking and carrier markets are starting to recover, which means next year could be the turning point for the business. Marvell shares are more difficult to value than Dell, considering Marvell's inconsistent earnings history, but analysts anticipate earnings to grow at an annualized rate of 23% over the next several years. The stock currently trades at a P/E of 37 on next year's estimate, which is consistent with the last three years. Investors should expect the stock to outperform the S&P 500 index in 2025 and beyond.



Both Dell Technologies and Marvell Technology are investing in key technological advancements to stay competitive in the long run. Dell is focusing on AI-optimized servers, while Marvell is investing in data center chips. These strategic investments position both companies to capitalize on the growing demand for AI infrastructure, making them top picks for 2025.

In conclusion, Citi's identification of Dell Technologies and Marvell Technology as top AI infrastructure stocks for 2025 is well-founded. Both companies are poised to benefit from the surging demand for AI infrastructure, offering investors attractive opportunities in the burgeoning AI market. As AI continues to transform industries, these companies are well-positioned to capitalize on the growing demand for AI infrastructure, making them strong contenders for investment in 2025 and beyond.