Investing in Promising Companies Amid AI Growth

A popular strategy for making gains in the stock market involves purchasing shares of strong companies that are undervalued and benefiting from long-term growth trends. This approach allows investors to tap into significant growth opportunities and the advantages of compound interest.

Artificial intelligence (AI) is a major trend that has the potential to substantially enhance the growth of numerous companies over time, possibly adding trillions to the global economy. Two firms that are particularly reaping rewards from the rise of AI are Marvel Technology and Micron Technology.

Let’s explore why these two companies are worth holding onto for the long haul.

Marvel Technology

Marvel Technology has experienced a remarkable turnaround thanks to AI. The maker of application-specific integrated circuits (ASICs) and networking chips had a fiscal year 2025 that ended with modest earnings of $5.77 billion, marking only a 5% increase. The GAAP net loss for that year stood at $1.02 per share, largely attributed to declines across various markets like enterprise networking and consumer devices.

However, the company’s fortunes shifted dramatically in the first quarter of fiscal year 2026, with revenue skyrocketing to $1.89 billion—an astounding 63% year-over-year increase. It also reported a GAAP net profit of $0.20 per share, a significant improvement from a loss of $0.25 per share in the same period the previous year. This turnaround can be largely credited to soaring demand for Marvel’s custom AI processors, which bolstered data center revenue by 76%, reaching $1.44 billion.

CEO Matt Murphy highlighted in a recent call that these impressive results are accompanied by rapidly growing AI silicon programs and significant shipping of products for AI and cloud applications. Marvel anticipates continued momentum in its data centers, not just this fiscal year but also into the next. The company is heavily involved with AI clients to create custom chips, which bolsters its future prospects.

Looking ahead, Marvel is optimistic about sustaining AI-driven growth, with a focus on innovative product development. The AI-related market is projected to grow from $21 billion in 2023 to $75 billion by 2028, and the company held an estimated 10% share of this market at the end of 2023. Some estimates suggest this might have increased to 15%. Marvel’s ambition is to expand this market share to over 20%, potentially leading to AI-related revenues exceeding $7.5 billion in the next three fiscal years.

Currently, Marvel’s shares are trading at 22 times revenue, making it a compelling buy, especially compared to the NASDAQ-100 Index, which has a revenue multiple of 31. Opportunities in the custom AI chip sector could significantly enhance growth for chipmakers in the future.

Micron Technology

Micron Technology specializes in manufacturing memory chips used in various computing devices. Recently, the company has gained traction due to increased usage of its products in AI data centers.

Micron’s high-bandwidth memory (HBM) is crucial for AI accelerators like GPUs, as it enables rapid data transfer while managing power consumption better than traditional memory. This allows for the effective handling of substantial data loads necessary for AI applications.

The demand for HBM is growing, with chip designers such as AMD increasing their requirements. Their recent MI350 series AI accelerators have boosted HBM capacity from 256 GB to 288 GB, and future models are expected to use even larger capacities.

The revenue potential in the HBM market is substantial, projected to rise from $1.8 billion in 2023 to $86 billion by 2030, reflecting a staggering compound annual growth rate of 68%.

The rise of AI in mobile and computer markets is also benefiting Micron, as AI-enabled devices require more advanced memory. In fact, Micron’s revenue for the first half of the current fiscal year jumped 59% compared to the same period last year, resulting in GAAP earnings of $3.08 per share, a turnaround from a loss of $0.40 per share in the past year.

Analysts predict a remarkable 439% increase in adjusted revenue this year, moving to $7 per share, followed by a further 58% increase next year. Presently, Micron shares are trading at 11 times earnings, suggesting investing in this stock may be beneficial as the optimistic outlook in the memory market supports a steady growth trajectory in the years to come.