Marvell Technology's AI Chip Prospects Dims Amid Rising Tariff Concerns

We've recently released a list of Top 10 Artificial Intelligence Stocks Stealing the Show This Week In this piece, we will examine how Marvell Technology, Inc. (NASDAQ:MRVL) measures up against the leading ten AI stocks currently grabbing attention this week.

Morgan Stanley, an investment firm, asserts that electricity demand will remain robust irrespective of potential recessions triggered by Trump’s tariff policies. The high energy consumption required for operating data centers ensures consistent demand. Even with possible dips in industrial usage due to economic contractions, advancements in efficiency by companies like Ant Group and DeepSeek should sustain overall demand levels. Additionally, repatriating manufacturing industries to the U.S. could mitigate these short-term declines in industrial demand.

We think the trend in power demands is more resilient compared to previous cycles, partly because of the inflexibility in the demand from data centers. While industrial demand might decrease shortly, the return of manufacturing activities domestically will be beneficial over the long run.

Analysts headed by Andrew Percoco.

READ ALSO: 10 Artificial Intelligence Stocks Soaring Due to Recent Reports Today and 10 AI Stocks That Are Worth Keeping an Eye On Currently .

A comparable study by a Bloomberg The report predicts that electricity usage by U.S. data centers might increase between 20% and 40% in 2025, with robust double-digit growth expected to continue through 2026-30.

Although Morgan Stanley recognizes that swift regulatory shifts could significantly impact major financial commitments, it also predicts that energy usage driven by artificial intelligence will increase tenfold by 2028.

Considering this, we aim not to underestimate the potential 'shock' in demand in the short term. Such an occurrence might result in decelerating order increases for certain businesses.

Historical data indicates that energy stocks have proven resistant even when the economy declines. The company pointed out that, starting from 1960, consumption dropped by an average of only 0.2 percent during these times.

Utility stocks tend to perform well during a recession due to their defensive characteristics,

This perspective remains hopeful due to significant investments in AI infrastructure from major technology companies like Meta, Amazon, and Alphabet. The reason for this optimism lies in these hyperscale companies' desire to stay ahead in the field of artificial intelligence, coupled with their extensive product lines that require substantial GPU resources.

To compile the list for this article, we sifted through numerous news articles, conducted stock analyses, and reviewed press releases to identify AI-focused stocks. Additionally, these selections have garnered significant interest from hedge funds. It’s important to mention that the hedge fund data utilized here pertains specifically to the fourth quarter of 2024.

Why do we focus on the stocks that hedge funds amass? It's straightforward: our analysis indicates that mimicking the top choices from leading hedge funds allows us to exceed market performance. Each quarter, our quarterly newsletter recommends 14 small-cap and large-cap stocks, achieving returns of 373.4% since May 2014, surpassing its benchmark by 218 percentage points. see more details here ).

A production line in a semiconductor plant where employees are stationed at various points.

Marvell Technology, Inc. (NASDAQ: MRVL )

Number of Hedge Fund holders: 105

Marvell Technology, Inc. (NASDAQ: MRVL), which specializes in the creation and manufacturing of semiconductors, faced some adjustments in market expectations recently. On April 17, analysts at Stifel revised their forecast for Marvell’s stock price downward, setting a new target of $80 per share instead of the previous estimate of $115, yet maintained an overall "Buy" recommendation. According to them, the company's performance across divisions such as Analog, Connectivity, and Processors might reflect mixed outcomes during the current fiscal quarter largely because of trade-related challenges. They further noted that projections for the following quarter seem less optimistic than expected. Regardless of the duration or scale of these import duties, the experts believe that the likelihood of seeing declines within the sector has significantly risen.

Overall, MRVL ranks 8th on our list of top 10 AI stocks in the spotlight this week. While we acknowledge the potential of MRVL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MRVL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock .

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires .

Disclosure: There are no conflicts of interest. This article was initially published here. Insider Monkey .

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