HSBC Sees Marvell (MRVL) as an 'Important AI Player,' But Not a Top Contender

Marvell Technology, Inc. (NASDAQ:MRVL) is one of the Hot AI Stocks to Keep on Your Radar. On November 24, HSBC initiated coverage on the stock with a “Hold” rating and an $85 price target. The firm holds a neutral view on Marvell as it believes that Marvell is an “important AI player,” but lacks conviction as compared to stronger competitors.

According to analyst Frank Lee, Marvell may be bullish on its ASIC strategy but Broadcom has clearer ASIC momentum heading into the next cycle.

“Marvell is emerging as an important AI player, driven by its ASIC and optical business. We cover it from Asia as 70%-plus of its revenue comes from the region.”

The firm believes that the ASIC story is not matching expectations for Marvell. Hyperscalers’s rising capex usually implies more demand for ASIC chips. That said, the increase in hyperscaler capex forecasts should boost ASIC’s share of that capex to rise to 13% in 2027e.

Marvell may be optimistic about its ASIC plans, but analysts don’t feel the same optimism.

“While Marvell is bullish about its ASIC strategy, we don’t share its optimism. We expect Marvell’s key rival Broadcom to benefit the most as its ASIC roadmap has greater visibility. Marvell’s share price is down 26% y-t-d, while Broadcom’s is up 53% (vs S&P500: +13%).”

Marvell Technology, Inc. (NASDAQ:MRVL) engages in the development and production of semiconductors, focusing heavily on data centers.

While we acknowledge the potential of MRVL  as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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