Bank of America Says Marvell and AMD Are 2 Top ‘AI Compute’ Stocks to Buy Now

AI stocks have been back in the spotlight as investors continue to weigh the pace of chip demand, Big Tech’s spending on artificial intelligence, and the next leg of earnings growth in the upcoming season.

Simultaneously, Bank of America is pointing out some clear winners in this niche. In a recent note, Bank of America flagged Marvell Technology (MRVL) and Advanced Micro Devices (AMD) as two top “AI compute” stocks to buy now. BofA explained that Marvell and AMD play key roles in the AI infrastructure stack. Marvell is a leader in high-speed networking and data center switches, while AMD supplies CPUs and GPUs for data center AI workloads. The bank remains bullish on these names even as memory stocks waver, recalling Google’s TurboQuant news. BofA believes AI spending remains robust, and it ranked “AI Compute” as its most preferred semiconductor subsector, listing AMD and Marvell among the top picks. 

Moreover, BofA sees these chip stocks positioned to gain as companies like Alphabet's (GOOG) (GOOGL) Google and Microsoft (MSFT) build out AI data centers.

AI Stock #1: Marvell Technology (MRVL)

Marvell Technology is doing what many chip companies only talk about. They are turning AI demand into real growth. The company’s chips help move data fast inside AI data centers. That matters because AI systems need powerful networking gear to connect servers, memory, and storage. So it's clear that Marvell sits right in the middle of that buildout.

MRVL stock has already had a big run this year, rising roughly 50% year-to-date (YTD), and the stock has nearly doubled over the past year. However, that brief rally has pushed the valuation higher, too. The stock now trades at a 30 times forward earnings multiple and about 9 times forward sales, which is significantly higher than the sector median, and that could expose it to downside risks if growth expectations are not met, particularly in a competitive landscape with strong players like Nvidia (NVDA) and Broadcom (AVGO).

Still, the company has a strong bull case. Marvell recently unveiled a 260-lane PCIe 6.0 switch aimed at AI data centers. It also has a growing backlog and more design wins. With cloud giants and hyperscalers still spending heavily on AI infrastructure, Marvell’s networking chips could stay in demand. Marvell Technology's partnership with Nvidia, bolstered by a $2 billion investment, positions it strongly in the AI market, enhancing its growth trajectory through expanded market opportunities and advanced photonic technologies. 

Moreover, Marvell's data center segment, a major growth driver, delivered robust revenue increases, with significant demand for its interconnect and custom silicon products, which shows its critical role in the AI-driven data center buildout.

The latest numbers back that up. In the fourth quarter of fiscal 2026, revenue rose 22% year-over-year (YoY) to $2.219 billion, a record for the company. Earnings per share (EPS) jumped 81% to $0.46. For the full fiscal year, sales climbed 42% to $8.195 billion, while EPS reached $3.07. CEO Matt Murphy called out “robust AI demand” as the key driver, and he sees more growth ahead in fiscal 2027.

Wall Street seems to agree. Barchart’s consensus rating on MRVL stock is a “Strong Buy.” The stock is trading near its mean price target of $120, yet its street high target of $164 still implies an expected 37% upside premium from the current level if the upcoming quarter remains as strong as the last one. Marvell is expected to post 90% revenue growth to $2.4 billion and 30% EPS growth to $0.61, highlighting explosive AI-driven momentum, especially in networking chips.

AI Stock #2: Advanced Micro Devices (AMD)

Advanced Micro Devices is already a big name in AI, and it is starting to look like a bigger winner than many investors first expected. The chipmaker sells EPYC CPUs and Instinct GPUs that help power data centers, servers, and supercomputers. Those products are becoming more important as AI spending keeps rising. 

AMD’s stock has also rallied on the AI wave, though more modestly this year. YTD AMD is roughly 15% up and has jumped more than 176% over the past year. It trades near 35 times forward earnings on FY2026 estimates and about 20 times forward sales. That’s expensive by traditional chip standards but cheaper than, say, Nvidia in its prime.

The company has recently secured significant contractual agreements for AI systems, providing long-term revenue visibility. Its strong supply chain position and partnerships with major players like Meta (META) and OpenAI showcase its growth potential in the AI market.

AMD's Helios rack-scale platform and MI450 accelerator are expected to be major growth drivers, challenging Nvidia's dominance. The strategic partnership with OpenAI is set to expand, with a projected 60% growth in data center revenue over the next three to five years

In the fourth quarter of 2025, AMD reported record revenue of $10.27 billion, up 34% YoY, while earnings per share came in at $0.92, ahead of expectations. For the full year, revenue reached $34.64 billion, also up 34%, and EPS landed at $4.17. CEO Lisa Su pointed to broad demand for high-performance computing and AI platforms, which is precisely what investors want to hear.

A lot of that growth came from data center GPUs and next-gen consoles, but the real story heading into 2026 is AI. AMD has also been striking new partnerships, including its Helios rack-scale AI platform with Celestica. That suggests the company is still expanding its reach in the market.

For the upcoming quarter, AMD is expected to deliver 32% revenue growth to $9.8 billion and 33% EPS growth to $1.04, supported by steady expansion driven by AI and data center demand.

Analysts remain upbeat on AMD stock. According to Barchart, the mean price target of $287.39 says the consensus target points to about 22% upside, and the consensus from 45 analysts is “Strong Buy.” The competition is intense, but AMD’s AI and high-performance computing franchise is looking stronger by the quarter.