Artificial intelligence (AI) infrastructure spending is poised to grow significantly in 2026, driven by huge investments in data centers that handle AI workloads in the cloud.
Major hyperscalers in the U.S., such as Alphabet, Amazon, Meta Platforms, and Microsoft alone are anticipated to spend $650 billion in AI infrastructure this year. That would be a major increase over last year's outlay of $410 billion. However, these aren't the only companies spending hundreds of billions of dollars on AI data centers. Pure-play AI specialists such as OpenAI and Anthropic, along with neocloud providers such as CoreWeave and Nebius, are also going to spend big to bring additional AI compute capacity online.
This is great news for Marvell Technology (MRVL +0.34%), a company that designs custom AI processors and networking chips. In fact, it won't be surprising to see Marvell turning an investment of $10,000 into $15,000 by the end of the year. Let's look at the reasons why.
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Marvell Technology is clocking outstanding growth thanks to AI
Marvell released fiscal 2026 fourth-quarter results (for the three months ended Jan. 31, 2026) on March 5. The company posted a terrific 42% increase in fiscal 2026 revenue to $8.2 billion. Non-GAAP earnings surged by 81% last year to $2.84 per share.
This growth was fueled by Marvell's data center business, which grew by 46% last year and exceeded $6 billion. The company saw outstanding demand for its data center interconnect, switching, storage, and custom chips used in data centers. Specifically, its custom processor revenue doubled last year, which isn't surprising as hyperscalers have been turning to these chips to run AI workloads in the cloud.
NASDAQ: MRVL
Key Data Points
Bloomberg points out that Marvell designs custom AI processors for the likes of Amazon and Microsoft. The company is expected to command 20% to 25% of the custom AI processor market in the long run, which would be a significant improvement over its share of less than 5% in 2023. Marvell plans to achieve this impressive market share increase by landing more business from the top four U.S. hyperscalers. It also aims to get more business from emerging cloud infrastructure companies.
Marvell management remarked on the latest earnings call that it expects a 40% spike in data center revenue in fiscal 2027, while overall revenue is anticipated to grow by 34% to $11 billion. What's more, Marvell believes that it can achieve $15 billion in revenue in the next fiscal year, driven by more than 20 chip designs that will go into production over the next couple of years.
Clearly, Marvell is poised to make the most of the AI-focused application-specific integrated circuit (ASIC) market, which is anticipated to witness a 3x increase in shipments between 2024 and 2027, according to Counterpoint Research. The good news for investors is that analysts have become more bullish about Marvell's growth prospects following its latest quarterly report.
MRVL EPS Estimates for Current Fiscal Year data by YCharts
Throw in the company's attractive valuation, and it won't be surprising to see it deliver solid gains to investors in 2026 and beyond.
Why the stock seems primed for a 50% jump in 2026
Let's say you have $10,000 in investible cash right now after paying your bills, saving enough for difficult times, and clearing high-interest loans, and you want to add a growth stock to your portfolio with that money. Buying Marvell as part of a diversified portfolio could be a smart move.
Analysts are anticipating a 33% increase in its earnings this year to $3.79 per share, followed by a stronger jump of 42% in the next fiscal year. Assuming Marvell manages to grow in line with Wall Street's expectations and achieves $3.79 per share in earnings this year, and trades at the U.S. tech sector's average earnings multiple of 39, its stock could jump to $148.
That's a potential increase of 66% from current levels, suggesting that this AI stock could indeed turn $10,000 into at least $15,000 in 2026. Even better, the outstanding earnings growth that Marvell is expected to deliver over the next couple of years should pave the way for further upside.
