AI Investors Are Becoming Pickier. 2 Stocks Still Stand Out.

While the artificial intelligence (AI) frenzy may have cooled, the fire still burns bright. The investment theme is no longer about picking every AI-related stock. Instead, investors are now becoming more selective and are rewarding businesses that are turning surging demand into real revenue, profits, and long-term growth. With this shift in market sentiment, AI infrastructure winners like Marvell Technology (MRVL) and Broadcom (AVGO) continue to stand out.

AI Winner #1: Marvell Technology (MRVL)

Marvell Technology is a semiconductor company that designs the chips used in data centers, cloud computing, AI infrastructure, networking, storage, and telecommunications. As hyperscale customers continue to invest aggressively in AI infrastructure, Marvell Technology is entering a stronger growth cycle, which is why investors are pouring money into the stock. MRVL stock has surged an impressive 131% year-to-date (YTD), massively outpacing the broader market.

A few months ago, management had forecasted a high-single-digit sequential pace through fiscal 2027. But that picture has changed drastically. Now, management expects 10% growth sequentially for second-quarter revenue of $2.7 billion, a growth of 35% year-over-year (YoY) at the midpoint. Furthermore, the company expects to reach $3 billion in revenue by the third quarter. In fact, full-year revenue is now expected to grow 40% YoY to nearly $11.5 billion.

Robust customer demand and exceptional bookings across its data center portfolio are pushing results above expectations. Notably, the segment revenue surged 27% YoY to $1.8 billion, led by optical interconnect products, custom silicon programs, and Ethernet switching solutions. Data center revenue is projected to increase 50% YOY in fiscal 2027, before accelerating again to roughly 55% growth in fiscal 2028. This reflects the growing importance of networking inside AI data centers.

Advanced and complex AI models require enormous volumes of data to move rapidly across thousands of processors with extremely low latency. Marvell believes this will boost demand for its networking portfolio, particularly 800G connectivity products and 1.6-terabit solutions. Therefore, its interconnect business is now expected to grow more than 70% YoY in fiscal 2027.

Furthermore, its expanded collaboration with Nvidia (NVDA) for silicon photonics, NVLink Fusion integration, and AI-RAN is strengthening its position across the expanding AI infrastructure ecosystem. Analysts now project EPS growth of 42.13% in fiscal 2027 and another 67% in fiscal 2028. Marvell's ability to convert rising demand into measurable earnings growth and its expanding long-term opportunities could continue to set it apart from many of its competitors.

Overall, analysts remain strongly bullish about MRVL stock. Out of the 36 analysts covering shares, 26 have a “Strong Buy,” three have a “Moderate Buy” recommendation, and seven have a “Hold” rating. Marvell’s average price target of $262 implies the stock can climb by another 23.4% from current levels. Plus, the high target price of $400 implies a potential upside of 108% from current levels.

AI Winner #2: Broadcom (AVGO)

Broadcom is a semiconductor and infrastructure software company that develops chips and enterprise software used in AI data centers, cloud computing, networking, broadband, wireless communications, storage, and cybersecurity. Broadcom continues to deepen its presence across the AI ecosystem, yet investors haven’t yet recognized its full potential. Despite another great quarter and many multi-year agreements with major AI customers, AVGO stock has climbed just 11% YTD.

In the second quarter of fiscal 2026, total revenue climbed 48% YoY to $22.2 billion, driven by a 79% increase in semiconductor revenue. Notably, close to three-quarters of that growth came from AI products, with AI semiconductor revenue up 143% YoY to $10.8 billion. The company’s networking products also contributed 40% to total AI semiconductor revenue. The demand pipeline remains exceptionally strong. The company has signed multiple long-term contractual agreements with Google, Meta Platforms, and Anthropic. Additionally, it has signed an agreement for a 1.3 GW deployment in 2027 as part of a 10 GW agreement through 2029 with OpenAI. The company has additional $6 billion purchase orders from its other two AI customers. 

Broadcom enters the second half of the fiscal year with more than $30 billion in AI semiconductor bookings against $10.8 billion in shipments. For the third quarter alone, the company's AI semiconductor revenue is to climb by 200% YoY to $16 billion, while total revenue could increase by 84% to $29.4 billion. 

It's not just the hardware business but also its infrastructure software business led by VMware that adds another layer of growth. The company expects third-quarter software revenue to grow 31% YoY to reach $8.9 billion. The company also generated $10.3 billion in free cash flow, which supports its continued investments in AI while rewarding shareholders. It paid $3.1 billion in cash dividends in the quarter.

The company has created a diversified portfolio spanning custom AI hardware and infrastructure software, along with long-term partnerships with many of the industry's largest AI developers. The market might be overlooking its true potential, but Broadcom is well-positioned to capitalize on the global AI infrastructure buildout for years to come.

Overall, Wall Street has a consensus "Strong Buy" rating on AVGO stock. Of the 42 analysts with coverage, 33 analysts have a “Strong Buy,” three have a “Moderate Buy” rating, and six recommend a “Hold.” Based on the average target price of $516.59, the stock has potential upside of 31% from current levels. Plus, the high price target of $640 suggests shares could climb by 62% over the next 12 months.