Prediction: This Artificial Intelligence (AI) Chip Stock Will Make a Big Move in October (Hint: It’s Not Micron)
Key Points
Marvell Technology is expected to raise its guidance once again on Oct. 6.
The company's improving growth trajectory suggests it could make investors significantly richer.
The stock is expensive right now, but growth-oriented investors should focus on the bigger picture.
Micron Technology delivered impressive results for the fourth quarter of fiscal 2026 on Sept. 30, indicating that the artificial intelligence (AI) infrastructure boom is alive and well.
Micron makes memory and storage chips that play a critical role in AI data centers by transporting and storing the large volumes of data needed to train models and run inference applications. So, it wasn't surprising to see the company's results and guidance crushing expectations, paving the way for more upside in Micron stock this month.
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However, there is another key AI chip company that's poised to hold an important event in October. Marvell Technology (NASDAQ:MRVL) has scheduled its Investor Day for Oct. 6. Let's see why this date could be significant for Marvell investors and trigger a rally in the company's shares.
Image source: The Motley Fool.
Marvell Technology is expected to raise guidance on Oct. 6
Marvell Technology manufactures custom AI processors and networking chips. Both these markets have been growing at an incredible pace. Counterpoint Research estimates that shipments of custom AI processors will triple between 2024 and 2027. Meanwhile, Goldman Sachs notes that networking will be the next big bottleneck in the AI infrastructure market. The investment bank expects the optical networking market's revenue to jump over 10x between 2026 and 2028.
These catalysts explain why Marvell Technology has been consistently raising its guidance in recent quarters. The semiconductor specialist raised its fiscal 2027 revenue outlook to $12 billion, up from the prior estimate of $11.5 billion in August. It also increased its fiscal 2028 revenue guidance by $1.5 billion to $18 billion.
It is worth noting that Marvell called for $11 billion in fiscal 2027 revenue when it released its fiscal 2026 fourth-quarter results in March this year. Its fiscal 2028 guidance stood at $15 billion at that time, following a $2 billion upward revision from the December 2025 guidance. Investment banking firm RBC Capital Markets expects Marvell to increase guidance once again during its investor day presentation on Oct. 6.
Specifically, RBC expects Marvell to increase its fiscal 2029 AI revenue forecast by at least $2 billion from the current estimate of $10 billion. Additionally, RBC expects Marvell to substantially increase its total addressable market (TAM) guidance and 2030 market share estimates on Oct. 6.
The investment bank also estimates that an increase in Marvell's operating margins could propel its earnings per share (EPS) into the $15.00 to $20.00 range over the long run. That indeed seems possible, considering that Marvell's earnings are expected to jump by 48% in the current fiscal year to $4.21, followed by a significant acceleration in fiscal 2028 and another significant jump in fiscal 2029.
MRVL EPS Estimates for Current Fiscal Year data by YCharts
If Marvell delivers a stronger forecast for the next couple of fiscal years and raises its TAM estimate for 2030, driven by the healthy growth in custom AI processors and networking chips, it could win back investor confidence once again.
Though this AI stock has jumped by just over 3x in 2026, its shares have dropped 16% after reaching a 52-week high on June 18. Savvy investors should consider capitalizing on this pullback, as favorable management commentary could send Marvell on a bull run. Moreover, the strong long-term growth prospects indicate that Marvell could make investors significantly richer.
The stock can still double
You may be wondering if Marvell is worth buying following its stunning rally in 2026. The stock is expensive at 86 times trailing earnings and 62 times forward earnings. However, we have already seen that its earnings growth is poised to accelerate.
Assuming Marvell's earnings land between $15.00 and $20.00 per share in 2030, which seems quite possible given that its earnings per share could hit $10.45 in fiscal 2029 (which ends in January 2029), its stock could jump significantly from current levels. For instance, $17.50 in EPS could send Marvell stock to $525 even if it trades at 30 times earnings after four and a half years.
That's nearly double Marvell's stock price right now. So, investors looking to buy a top growth stock on the dip can consider buying Marvell Technology ahead of its investor day, when it could make a big move.
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group, Marvell Technology, and Micron Technology. The Motley Fool has a disclosure policy.