The current market rally has been nothing short of remarkable, with the S&P 500 surging an impressive 49% since its 2022 low. And if history is any indication, we’re just getting started. According to Stifel, the average bull market lasts a whopping 4.9 years, with an average return of 177%. With less than two years under our belt, investors can expect several more years of strong growth.
One sector that’s poised to benefit from this trend is the semiconductor industry, particularly those companies serving the artificial intelligence (AI) training market. Two Wall Street analysts are bullish on Arm Holdings (NASDAQ: ARM) and Marvell Technology (NASDAQ: MRVL), citing their strong growth potential and dominant market positions.
Arm Holdings has seen its stock price skyrocket over the past year, driven by the increasing adoption of its high-performance, energy-efficient chips in data centers and devices. With AI set to be a key driver of growth for the semiconductor industry over the next decade, Arm’s licensing and royalty-based business model is expected to continue generating impressive profits. In fact, the company’s adjusted operating profit margin stands at a remarkable 48%, making it an attractive investment opportunity.
Marvell Technology, on the other hand, is well-positioned to benefit from the growing demand for custom AI chips. Its products are used in a variety of markets, including self-driving cars, data centers, and consumer electronics. With its AI custom silicon program ramping up, Marvell is expected to see significant revenue growth in the coming quarters. The company’s leading electro-optics products are also in high demand, driven by the need for robust networking systems in AI data centers.
While both stocks have already seen significant gains, analysts believe there’s still plenty of upside potential. With the semiconductor industry forecast to grow 10% annually, Arm and Marvell are poised to benefit from this trend. Investors looking to capitalize on this growth should consider adding these stocks to their portfolios.
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