Marvell Technology (MRVL) recently reported its earnings, providing guidance for the next quarter. While the guidance may not have been remarkable, the standout aspect for investors is Marvell’s projected 100% increase in AI-related revenue, expected to reach around $800 million by fiscal 2025. This represents a significant portion of Marvell’s overall revenues, with at least 10% attributed to AI.

Marvell CEO, Matt Murphy, emphasized the company’s strong focus on AI and its readiness to cater to the increasing demand for AI data centers. The unique requirements of AI data centers, with a multitude of interconnections, position Marvell favorably in this market.

I think Marvell’s storage solutions could indirectly benefit from AI advancements, particularly in generative AI applications involving video and images. While the specific revenue contribution from storage to AI is challenging to quantify, it presents an additional growth opportunity for the company.

Marvell’s recent earnings results indicate stabilization and improvement, with expectations of enhanced profitability in fiscal 2024. Gross margin and operating margin expansion are anticipated in the second half of the year.

Considering Marvell’s AI focus, potential revenue growth, and improving financials, investors are showing renewed interest in the stock. While valuation may not be highly attractive, the combination of being an AI beneficiary, a compelling narrative, and positive financial outlook make Marvell is taking a look at.