Shipments of artificial intelligence (AI) servers have surged in recent years, driven by significant investments from cloud service providers in infrastructure for training and deploying AI models. According to TrendForce, the global AI server market could reach $187 billion in revenue this year, a 69% increase from 2023. Various companies stand to gain from this growth, including chip makers like Nvidia, custom chip manufacturers like Broadcom, and server solution providers like Dell Technologies. This article focuses on Micron Technology and Marvell Technology, both crucial players producing essential components for AI servers. Micron’s high-bandwidth memory (HBM) chips are in high demand because they enable faster data transfer, improving performance while lowering power consumption. Micron has sold out its HBM capacity for this year and next and anticipates a more diversified revenue profile by 2026, thanks to its new HBM3E chip, which offers 20% less power consumption and 50% more capacity than competitors.

Micron aims to capture 20% to 25% of the HBM market by next year, projecting its revenue to surge by 52% to $38 billion for the current fiscal year, with earnings forecasted to rise from $1. 30 to $8. 94 per share. Currently, Micron’s shares have a forward earnings multiple of 11 and a PEG ratio of 0. 16, indicating they may be undervalued relative to anticipated growth opportunities in the AI server market. Marvell Technology specializes in application-specific integrated circuits (ASICs), which are increasingly in demand as major cloud service providers, such as Meta, Google, and Amazon, develop in-house processors to cut costs. ASICs are expected to account for 26% of the AI server chip market by 2024, with a revenue opportunity of about $150 billion. While Marvell's overall revenue declined by 5% year-over-year to $1. 27 billion in the second quarter of fiscal 2025, data center revenues saw a substantial increase of 92% to $881 million. The company anticipates continued growth, with expectations for its data center business to expand in the high teens percentage-wise this quarter. Analysts foresee robust earnings growth of 21% annually for Marvell over the next five years, making it a compelling option for investors eyeing semiconductor investments linked to the AI sector. Investors should exercise caution before buying Micron Technology’s stock, as it was not included in a recent list from The Motley Fool of the top ten stocks to buy. Historical insights from The Motley Fool suggest that investors who acted on similar recommendations have seen significant returns. In summary, both Micron and Marvell are well-positioned to benefit from the booming AI server market, making them attractive investment options as demand for AI-driven solutions continues to grow.