The artificial intelligence (AI) sector is experiencing rapid growth, with projections indicating that the global AI market could reach approximately $826.7 billion by 2030, up from $184 billion in 2024.
Among the many players in this space, Amazon (NASDAQ: AMZN) and Marvell Technology (NASDAQ: MRVL) stand out for their ability to leverage AI-driven innovations, making them promising bets for exponential returns in the coming years.
Amazon (NASDAQ: AMZN) stock
Amazon remains a juggernaut in the tech sector, leveraging its focus on artificial intelligence to drive growth across its cloud computing and digital advertising businesses. This dual-pronged approach offers significant opportunities for expansion in two of the fastest-growing industries.
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The company’s $8 billion investment in AI startup Anthropic shows its role in dominating the AI cloud space. This partnership establishes Amazon as Anthropic’s primary cloud provider and “primary training partner,” enhancing its position in the competitive AI ecosystem.
Amazon Web Services (AWS) reported a 19% year-over-year revenue increase in Q3 2024, reaching $27.5 billion, driven by surging demand for generative AI solutions.
With the global AI, cloud computing market projected to hit $2 trillion by 2030, according to Goldman Sachs, Amazon’s 31% market share positions it as the clear leader, surpassing Microsoft Azure (20%) and Google Cloud (11%), as per Synergy Research Group.
While AWS dominates headlines, Amazon’s advertising business has quietly become a powerhouse.
In Q3, ad revenue rose 19% to $14.3 billion, fueled by its commanding presence in e-commerce and streaming platforms.
Although it remains a smaller player compared to Alphabet Inc. (NASDAQ: GOOG) and Meta Platforms Inc. (NASDAQ: META), amazon’s advertising arm is growing rapidly. By 2026, eMarketer projects Amazon will capture 17.3% of the U.S. digital ad market, generating an estimated $94 billion in revenue. This expansion highlights its ability to challenge industry giants in a highly competitive landscape.
Analysts remain bullish on Amazon’s prospects, with JPMorgan analysts calling it “the best idea among internet stocks.” Amazon’s Prime program continues to be a cornerstone of its retail success, supported by its extensive distribution network and physical retail presence through Whole Foods Market.
Additionally, the company’s push into digital ad opportunities, including Prime Video and sports content, is expected to drive ad sales further. Amazon Haul, a new low-cost e-commerce platform, represents another strategic move aimed at countering competition from Chinese rivals.
Despite its impressive growth trajectory, Amazon’s valuation appears balanced for a high-growth company.
The stock trades at a forward P/E ratio of 45.04, reflecting optimism for its long-term potential. At the close of the latest trading session, Amazon shares stood at $210, marking a one-month gain of 7.6% and a year-to-date rise of 40%.
With its focus on AI advancements, expanding advertising footprint, and retail dominance, Amazon remains well-positioned for sustained growth in the future.
Marvell Technology (NASDAQ: MRVL) stock
Marvell Technology has established itself as a vital player in the AI ecosystem, supplying semiconductors critical to AI infrastructure and benefiting from the ongoing surge in data center investments.
In Q2 2024, Marvell’s data center revenue nearly doubled year-over-year to $881 million, fueled by strong demand for electro-optics custom silicon, storage, and networking products.
Analysts forecast the company’s total revenue to climb from $5.3 billion in FY2024 to over $9 billion by FY2027, underscoring its growth potential.
A recent five-year strategic partnership with Amazon Web Services further highlights Marvell’s importance in the sector, with the company providing advanced semiconductor solutions such as custom AI compute ASICs and Ethernet switching silicon solutions.
Additionally, Marvell will use AWS’s cloud-based electronic design automation (EDA) tools for its silicon development.
This collaboration not only enhances Marvell’s position in the AI market but also shows its capability to meet the rising demand for next-generation data center technologies.
Trading at $97.45, Marvell shares have gained 66% year-to-date, with annualized earnings growth projected at 23%. At its current valuation, it remains a compelling opportunity for investors seeking exposure to AI infrastructure.
In conclusion, both Amazon and Marvell are at the forefront of the AI revolution, capitalizing on its rapid adoption and long-term potential.
Amazon’s dual dominance in AI cloud computing and advertising, coupled with Marvell’s essential role in AI infrastructure, creates compelling investment cases for 2025 and beyond.
With continued growth in these segments, a $100 investment in these stocks today could yield exponential returns, solidifying their positions as key players in the AI-driven bull market.
Featured image via Shutterstock
