en.Wedoany.com Reported - Marvell Technology and Flex are set to join the S&P 500 Index. In a podcast discussion, analysts noted that Marvell focuses on the data infrastructure sector, with its high-speed optical interconnect chips and custom AI chip business standing out as highlights. Nvidia CEO Jensen Huang once predicted that Marvell could become a trillion-dollar market cap company, and Nvidia's own $2 billion stake in Marvell supports this view.
Marvell is a data infrastructure giant specializing in high-speed optical interconnect chips and custom AI silicon, technologies critical for transmitting data across large-scale server clusters. Hyperscale cloud providers are using Marvell to design custom AI chips, a business expected to generate over $10 billion in revenue by the company's fiscal year 2029. The optical business is growing at a rate of over 70%, primarily because it can connect distributed GPU clusters at the speed of light. Analysts believe that if Marvell can maintain a mid-teens growth trajectory, achieving approximately $50 billion in revenue and $25 billion in EBITDA by 2031, then a trillion-dollar valuation is mathematically reasonable, given a roughly 40x valuation premium for AI infrastructure.
Flex is a large electronic manufacturing services company that provides production services for firms that design products but do not want to manufacture them themselves. Its AI data center business is the current primary growth driver, encompassing power management products, cooling products, and power infrastructure products. Flex reported $28 billion in revenue last fiscal year, with earnings growing at a double-digit rate for the past six consecutive years. Management expects revenue to grow 18% and earnings per share to grow 32% this fiscal year. The company is spinning off its cloud and power infrastructure business, which is expected to grow 65% to 70% this year.
Analysts believe that Flex's current price-to-earnings ratio of about 35x is relatively high. For new buyers, the current price does not seem cheap. However, if a 20% to 30% pullback occurs in the future, it could attract investor interest. The spun-off AI infrastructure business, as a standalone entity, may command a higher valuation.
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