Artificial intelligence (AI) has been a key growth driver for the stock market in the past three years. That isn't surprising, as the huge investments in this technology by tech giants and start-ups have led to a massive increase in the revenue and earnings of many companies.
The good news for investors is that they can expect AI stocks to have another solid year in 2026. Deutsche Bank points out that AI will continue to remain a catalyst for the stock market in the new year, driven by the continuation of massive infrastructure investments. However, the prolific surge in AI stocks in recent years means that there are not many stocks offering a mix of growth and value available in this sector.
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Micron Technology is a solid value pick in AI right now
Top AI names such as Palantir Technologies, Nvidia, Broadcom, and others are trading at expensive valuations. Memory specialist Micron Technology (MU 3.18%), however, is an outlier. The company is trading at just 11 times forward earnings and 9 times sales, despite the remarkable growth in its revenue and earnings. Buying Micron stock at this valuation is a no-brainer, as the company is poised to witness a massive increase in its business going forward, due to the favorable dynamics in the memory market.
NASDAQ: MU
Key Data Points
Consensus estimates project Micron's revenue to double in the current fiscal year to almost $74.5 billion. The bottom-line growth is expected to be significantly larger, with analysts anticipating a nearly fourfold increase in earnings to $32.42 per share in fiscal 2026. It's worth noting that these estimates have shot up significantly in recent months. Moreover, analysts expect Micron to sustain its terrific growth next year.
MU EPS Estimates for Current Fiscal Year data by YCharts.
It's easy to see why that's the case. Counterpoint Research predicts that the price of dynamic random access memory (DRAM) could increase by 40% to 50% in the current quarter, followed by a 20% jump in the next quarter. Moreover, memory prices are expected to remain inflated in 2027 and 2028 as well due to supply constraints, driven by the huge appetite for memory chips used in AI accelerators deployed in data centers.
It is estimated that the high-bandwidth memory (HBM) chips used in AI data center accelerators are consuming three times the DRAM capacity of PC memory. Additionally, HBM is being deployed not just in graphics processing units (GPUs) but also in custom AI processors. This explains why there is a severe shortage of capacity, despite the efforts that companies like Micron are making to expand supply.
However, Micron is not the only value play in the AI infrastructure market. There's another company that's growing at a healthy pace and can be bought at an attractive valuation -- Marvell Technology (MRVL 2.18%). Let's look at the reasons why it is a solid bargain right now.
Marvell Technology's valuation and growth make it worth buying hand over fist
Marvell Technology designs custom AI processors and networking chips, which are in hot demand from several hyperscalers and AI companies. It has a solid client base that includes the top four major hyperscalers in the U.S., which are using 12 of its custom AI chip designs in their data centers. Marvell's custom AI chip designs are also used by emerging hyperscalers.
NASDAQ: MRVL
Key Data Points
This strong clientele is fueling healthy growth in Marvell's top and bottom lines. The company's revenue in the first nine months of the ongoing fiscal 2026 (which ended on Nov. 1, 2025) increased by 51% from the same period last year to almost $6 billion. Its non-GAAP net income has more than doubled during this period to $2.05 per share.
So, Marvell's forward earnings multiple of 23 makes it a no-brainer buy, as it is lower than the tech-focused Nasdaq-100 index's forward earnings multiple of 26. Even the sales multiple of 9.3 is attractive, considering the remarkable top-line growth it has been delivering. The good part is that Marvell's growth is likely to accelerate in the future.
That's because Marvell has secured an additional five design wins for its AI chips at a couple of U.S.-based hyperscalers and is engaged in deep negotiations with a third one. The new design wins will ramp into volume production by next year, indicating that Marvell should be able to sustain its healthy growth levels.
In all, the company could expand its opportunity in custom AI processors to more than 10 customers, with the potential to win over 50 chip designs. This explains why analysts are forecasting the company's growth rate to pick up.
MRVL EPS Estimates for Current Fiscal Year data by YCharts. EPS = earnings per share.
The improvement in Marvell's earnings growth is the reason why the company could trade at a premium in the future. Additionally, its earnings could increase at a faster pace than market expectations if it attracts more customers on board.
Like Micron, Marvell appears to be a top AI stock to buy in 2026 for investors seeking a value play within this rapidly growing sector, particularly given its potential to become a long-term winner based on the promising prospects of the custom AI processor market.
