Semiconductor stocks have been under pressure lately, as evidenced by the 1% retreat in the PHLX Semiconductor Sector index over the past month. However, chip designer Marvell Technology (MRVL +7.19%) has defied this sell-off.
The company's shares have jumped 37% over the past month. The stock's pop has been driven by a couple of solid catalysts -- an impressive set of results it released on March 5 and a recent deal with Nvidia that could significantly supercharge its growth. In fact, Marvell gives investors a terrific way to capitalize on the next big thing in artificial intelligence (AI) -- inferencing -- which is probably one of the reasons it has defied the broader sell-off in semiconductor stocks.
Let's look at the reasons Marvell could win big from the AI inferencing supercycle, which refers to a sustained period when demand for a product or a service exceeds supply.
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Marvell Technology's chips are ideal for AI inferencing purposes
Graphics cards designed by Nvidia have been ideal for training AI models. That's because graphics processing units (GPUs) are equipped with massive parallel computing power, allowing them to carry out thousands of calculations simultaneously to tackle the resource-intensive model training process. However, AI inference is much more specific, as the trained model is deployed in the real world to produce results.
NASDAQ: MRVL
Key Data Points
AI inference requires much fewer calculations and computing power than the training phase. As a result, GPUs are overkill for AI inference applications, which is why hyperscalers and AI companies are relying on custom chips to handle inference needs.
Marvell designs these custom chips for AI inference. Known as application-specific integrated circuits, these processors are designed to perform a specific task rather than the general-purpose computing done by GPUs. This is why they are faster at the tasks they are designed for, and more power-efficient, since they don't require the massive energy needed to run a GPU.
Importantly, as inference puts trained AI models into real-world applications, enterprises have been deploying AI inference at scale, according to Morgan Stanley. Nvidia CEO Jensen Huang predicts that inference will be the next stage of the AI boom.
That's precisely the reason Nvidia is partnering with Marvell to develop custom AI chip systems powered by the latter's networking solutions. Additionally, Nvidia has decided to invest $2 billion in Marvell. Don't be surprised if Nvidia's investment balloons in the future due to Marvell's impressive growth, clientele, and prospects in the custom AI processor market.
The chip company is already growing at a terrific pace
Marvell released its fiscal 2026 results (for the year ended Jan. 31, 2026) on March 5. It ended the year with record revenue of $8.2 billion, up by 42% over the prior year. Additionally, non-GAAP (adjusted) earnings per share surged by 81% to $2.84.
Marvell management noted that it achieved a record number of "design wins" in fiscal 2026. A design win occurs when a chipmaker's component has been selected for deployment by a customer. Not surprisingly, Marvell claims that its design wins will fuel future growth, which is precisely what analysts expect.
Data by YCharts.
Investors may want to consider adding this growth stock to their portfolios, as it is primed to benefit in a big way from the secular growth in AI inferencing.
