Last year, the market was obsessed with the AI theme. While there’s been some market rotation, it’s clear that the AI trend is here to stay. But given how much the big players in the space have run, investors may be better off buying smaller names.
For the AI hardware stocks, that may be a tall order. However, there are plenty of AI hardware stocks that still have plenty of room to run.
One such potential winner is Marvell Technology (MRVL). The chipmaker is pushing on AI technologies, but hasn’t run up as far as other names in the chipmaking space.
Marvell also benefits from infrastructure and data center hardware, which will also be key components for running AI technologies. The company’s data center technology in particular is strongly regarded, following years of investing in building up that business.
Action to take: Shares are back to the stock’s 52-week high from over the summer. Should shares break through from here, momentum will likely carry them higher from here. The company pays a modest 0.4 percent dividend.
For traders, a breakout higher will be bullish and perfect for buying call options. The May $70 calls, last going for about $4.10, could see mid-double-digit returns should a breakout higher occur.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.