Correction or Not: This Artificial Intelligence (AI) Stock Is a Great Long-Term Bet

The artificial intelligence (AI) sector has faced volatility in early 2025, with the Nasdaq Composite entering correction territory amid trade tensions and macroeconomic uncertainty. Yet beneath the noise, one stock—Marvell Technology (NASDAQ: MRVL)—emerges as a compelling long-term investment. Its explosive growth, undervalued multiples, and strategic positioning in the AI chip race make it a standout opportunity for patient investors.

Why Marvell (MRVL) Stands Out

Marvell’s recent financial results underscore its transformation into a leader in AI infrastructure. In fiscal 2025 (ended February 2025), its data center revenue—a segment accounting for 75% of total sales—surged 78% year-over-year, driven by soaring demand for its AI chips. This growth isn’t just cyclical; it’s structural. Analysts project Marvell’s AI revenue will “significantly exceed” a $2.5 billion target for fiscal 2026, up from an initial $1.5 billion forecast.

The chart reveals MRVL’s resilience: while its stock dipped 13% in early 2025 alongside broader tech corrections, its forward P/E of under 23x remains far cheaper than NVIDIA’s 26x multiple. This valuation discount ignores Marvell’s 78% EPS growth forecast for fiscal 2025 ($2.80 per share) and its ambitious roadmap.

The Long-Term Case for Marvell

1. Technological Leadership: Marvell’s upcoming 2-nanometer (nm) chip manufacturing process promises 15% performance gains and 30% lower power consumption compared to its 3nm chips. This edge positions it to capture a larger share of the $43 billion custom AI chip market, which is projected to grow at a 45% compound annual growth rate (CAGR) through 2028.
2. Scalable Market Share: Management aims to double its data center market share to 20% by 2028, fueled by partnerships with hyperscalers and cloud providers. Already, its AI server market share has jumped from 10% in 2023 to 23% in 2024, outpacing competitors like AMD and Intel.
3. Backlog and Demand: A $1.2 billion cumulative bookings backlog (up 75% year-over-year) signals strong demand for its AI solutions, including custom chips for clients like Alphabet and Meta.

Why the Correction Is Temporary

The recent dip in Marvell’s stock price reflects broader tech sector jitters, not fundamentals. Key risks—such as U.S.-China trade tensions—are mitigated by Marvell’s geographically diversified supply chain and its role as a second-source supplier to major tech firms. Meanwhile, the 90-day U.S. tariff pause and ongoing trade talks reduce the likelihood of a prolonged slowdown in AI chip demand.

Valuation and Growth Prospects

Marvell’s PEG ratio of 0.53 (price/earnings-to-growth) highlights its undervaluation. Analysts project 42% revenue growth to $8.2 billion in fiscal 2025, with earnings set to jump from $1.60 to $2.80 per share—a 78% increase. If Marvell achieves its long-term goal of a 20% data center market share, its revenue could exceed $15 billion by 2028, supporting a significant upward re-rating.

The Bottom Line

The AI sector’s short-term volatility is no reason to overlook Marvell Technology. With explosive revenue growth, a best-in-class valuation, and a strategic focus on high-margin AI chips, MRVL is positioned to capitalize on the $43 billion AI infrastructure boom. While geopolitical risks linger, the company’s technical prowess, diversified client base, and scalable business model make it a rare blend of value and growth. Investors who buy now may find themselves on the right side of history as AI reshapes the global economy.

Final Verdict: Marvell (MRVL) is a top-tier long-term bet in the AI revolution. Its current valuation offers a compelling entry point for those willing to look past near-term noise and embrace the next decade of AI-driven innovation.