AI Stocks Under the Radar: A Deep Dive into Micron, Marvell, and Qualcomm

The Rise of AI and Its Impact on Tech Stocks

The rise of artificial intelligence (AI), specifically generative AI, has sparked a boom in tech stocks. Beyond the well-known names like Nvidia and Palantir Technologies, investors are increasingly recognizing the potential of other AI-related stocks. This article examines three companies – Micron, Marvell, and Qualcomm – that are well-positioned to benefit from the ongoing AI revolution.

Micron: Memory Powerhouse in the AI Era

Micron Technology (MU) specializes in the production of memory chips, a critical component in computing. The memory market is notoriously cyclical, historically experiencing boom-and-bust cycles. However, Micron's development of high-bandwidth memory (HBM) is changing the game. HBM utilizes vertical 3D stacking to significantly increase data transfer rates and throughput, enabling advanced AI applications. This technological advancement contributed to a 31% increase in Micron's revenue in the third quarter of fiscal 2024 (ended May 31), reaching $9.3 billion. This growth translated to a net income of $1.9 billion, a substantial jump from $332 million in the same quarter last year. The improved performance reflects the demand for specialized memory solutions in the burgeoning AI market. For those unfamiliar with HBM, think of it as the superhighway for data in AI. The faster and more efficient the highway, the better AI applications perform.

Marvell: Building the Infrastructure for AI

Marvell Technology (MRVL) has traditionally focused on chips for the telecom and consumer sectors. However, its strategic move into custom ASICs (application-specific integrated circuits), particularly for data centers, has reshaped its perception among investors. Marvell's cloud solutions, interconnects, and network switches provide the fundamental infrastructure necessary for AI data centers. The company boasts that its solutions offer "unmatched performance" in this space. This value proposition is reflected in Marvell's financial results. In the second quarter of fiscal 2025 (ended August 2), revenue surged 58% year-over-year to $2 billion. This growth, coupled with a relatively modest 5% increase in operating expenses, resulted in a net income of $195 million, a significant turnaround from a $193 million loss in the same quarter of the previous year.

Qualcomm: A Chip Leader Looking Beyond Smartphones

Qualcomm (QCOM), despite its dominance in the smartphone chipset market, might be considered an underappreciated AI stock. While AI hasn't yet spurred a massive smartphone upgrade cycle, the eventual need for consumers to upgrade will inevitably drive demand for Qualcomm's AI-enabled chips. Furthermore, Qualcomm has proactively diversified its business, developing chips for the Internet of Things (IoT), automotive applications, and even the PC market. This diversification is already paying off, with automotive and IoT revenues increasing by over 20% in the third quarter of fiscal 2025 (ended June 29). Overall revenue increased by 10% year-over-year to over $10 billion, and net income surged to nearly $2.7 billion, a 25% increase compared to the previous year. This illustrates Qualcomm's successful transition into new growth areas, leveraging its expertise in chip design for a broader range of applications.