As the CEO of the artificial intelligence giant Nvidia, the largest company in the stock market, with a market cap of over $5 trillion, Jensen Huang has developed quite a following.
When Huang has something to say about AI, the market is usually paying close attention.
Yesterday, Huang, while speaking at a trade show called Computex, called Marvell Technology (MRVL +4.12%) a stock that will eventually hit a trillion-dollar market cap.
The stock rocketed 32.5% higher yesterday and is up another nearly 5.5%, as of 1:20 p.m. ET.
Still, Marvell only trades at around a $268 billion market cap, so it would experience fantastic gains if Huang’s prediction comes true.
Here’s why Huang sees Marvell reaching $1 trillion.
Image source: Getty Images.
Another critical component of the AI supply chain
In recent weeks, several companies that make critical hardware for scaling the AI supply chain have seen their stocks soar.
Memory stocks like Micron, which supply the memory that feeds data to graphics processing units (GPUs), have done well. Dell, a company that makes the servers and systems that house all of the components powering GPUs, also saw its stock melt up after incredibly strong earnings results.
As large language models (LLMs) become more complex and require GPU clusters to scale, more of these components will be needed, driving demand.
Huang sees Marvell playing a critical role in the supply chain as well.
Many investors previously knew Marvell for making application-specific integrated circuits (ASICs), custom chips that help LLMs handle specific AI workloads at scale, potentially more efficiently than a GPU would.
NASDAQ: MRVL
Key Data Points
This business actually somewhat competes with Nvidia’s general-purpose GPUs.
But what Huang is referring to is Marvell’s networking infrastructure products, which help transmit data between all the GPUs in a cluster; between various clusters in a data center; and even between data centers.
These products include Ethernet switch ASICs, which focus on transmitting data between servers that package GPUs, and digital signal processors that move data between data centers, among others.
Huang isn’t just pumping the company, either. Nvidia invested $2 billion in the company back in March and announced a strategic partnership that would enable Nvidia customers to better scale.
Has hype taken over?
Marvell had already been enjoying a strong year, but Huang’s comments have now put the stock up a whopping 243% this year.
Interestingly, Marvell reported its first-quarter earnings results for fiscal year 2027 on May 27, yet the stock didn’t move much.
The company reported results in line with Wall Street analyst expectations. Year-over-year revenue growth of 28% and adjusted earnings growth of 29% came in strong, but it isn’t exactly eye-popping in the AI world these days.
Marvell’s CEO Matt Murphy said the company is projecting “revenue growth to continue accelerating each quarter throughout fiscal 2027, driven by continued strength in our data center business.”
Guidance for the company’s second quarter at the midpoint also came in higher than what analysts had been expecting.
However, this recent run in the stock seems more powered by Huang’s comments, whereas Micron and Dell soared after their specific earnings results.
I do like the fact that Marvell has multiple AI businesses, including its custom chip business and network infrastructure products.
However, the stock is not cheap, trading at close to 76 times forward earnings and over 23 times forward sales.
It’s also going to live and die somewhat with the AI trade. After such a big run driven largely by hype, investors may want to wait for better entry points or at least practice dollar-cost averaging if they do buy the stock.
