Why are Marvell Technology stocks attracting attention?

Marvell Technology, Inc. (NASDAQ:MRVL) is among the notable artificial intelligence stocks on Wall Street's radar. On October 20, Barclays analyst Tom O'Malley downgraded the stock from 'Overweight' to 'Equal Weight' and set a price target of $80.00. The analysis highlights concerns regarding visibility on 2025 data center targets and the shift in market share in the artificial intelligence sector moving in favor of Broadcom (NASDAQ:AVGO).

According to Barclays, the story of custom application-specific integrated circuits is not expected to be as strong as initially anticipated until 2026. However, the company is expected to show robust growth in 2024 due to the impact of the 800G cycle. Nevertheless, concerns remain regarding long-term share dynamics, as Broadcom is projected to gain a 1.6% market share.

O'Malley stated, “MRVL is one of the biggest struggling stocks in our coverage. On the other hand, the company has a strong intellectual property portfolio, and its position at the center of the connectivity evolution makes it an important stock in artificial intelligence development. Conversely, while other AI stocks are showing continuous upward fundamental revisions, we have concerns about MRVL's ability to reach its data center targets for the coming year. An increase in AI interactions is expected post-2026, but with a significant portion of AI processing power shifting to Broadcom, we anticipate that the traditional Optical business segment may also experience a loss of share.”

Marvell Technology, Inc. is involved in the development and manufacturing of semiconductors and focuses on data centers. However, it should be noted that while considering MRVL as an investment opportunity, some AI stocks may present a greater upside potential and carry less risk.