While the stock market exhibits signs of slowing down, the artificial intelligence hype persists, presenting investment opportunities for traders. Among these opportunities are lesser-known names that offer significant value and potential.
In this regard, Finbold conducted an analysis, considering fundamental indicators, as well as real-world events that could impact the stock market. From this analysis, two stocks were identified with the potential for substantial gains in the future.
Marvell Technology (NASDAQ: MRVL)
Marvell Technology (NASDAQ: MRVL) saw a decline in its shares earlier this month after the company guided for the first quarter of fiscal 2025 unsettled investors.
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The weak outlook was attributed to soft demand in consumer, carrier infrastructure, and enterprise networking end markets.
At the latest closing, MRVL stock was priced at $70.88, showing a 0.24% pre-market gain. Over the past five trading sessions, there’s been a slight drawback of 1.32%.
Yet, the year-to-date chart reveals a strong performance, with MRVL stock rising by over 20% in the past three months.
Despite this, management is optimistic about market conditions improving, foreseeing a recovery in the second half of fiscal 2025.
Despite the tepid guidance, many analysts remain positive about Marvell, primarily due to the robust performance of its Data Center segment. This segment experienced a 54% year-over-year growth and a 38% sequential rise in revenue in the fourth quarter of fiscal 2024, driven by AI-induced demand.
In light of these recent results, Piper Sandler analyst Harsh Kumar reiterated a ‘buy’ rating on MRVL stock and increased the price target to $100 from $70. Kumar anticipates the company reaching its low point in Q1 FY25, with modest acceleration expected in the fiscal second quarter and significant acceleration thereafter.
With only 2.40% of shares shorted, MRVL stock shows minimal short-selling activity, indicating traders’ confidence in its future potential.
Western Digital (NASDAQ: WDC)
Western Digital (NASDAQ: WDC) recently announced plans to split into two verticals: one focusing on hard drives and the other on NAND business.
The current CEO, David Goeckeler, will lead the NAND flash memory spinoff, while Irving Tan will head the standalone hard disk company. The spinoff is expected to be completed in the second half of this year, seen as a positive move for the company.
As of the latest closing on April 4, the WDC stock price stood at $70.54. Pre-market gains of 3.44% indicate a positive start for today’s session, building on the 3.33% increase over the past five trading sessions.
Year-to-date, the WDC stock chart shows impressive gains of nearly 40%.
Additionally, the company reported upbeat Q2 results in late January, with revenue reaching $3 billion and a loss of $0.69 per share, surpassing consensus estimates.
This strong performance has prompted analysts to readjust their targets, with UBS assigning a $65 target on March 5, which has been already surpassed, further spurring optimism surrounding WDC stock.
With 4.78% of shares shorted, WDC has a slightly higher percentage of shorted shares compared to MRVL. However, this figure still reflects investors’ confidence in its prospects.
With robust financials and increasing demand, these two stocks offer a cost-effective opportunity to invest in the expanding artificial intelligence sector.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
