Can Marvell Compete With Nvidia? AI Era Event Sheds Light

It's been a monster year for Nvidia NVDA. The pioneering chipmaker has become the hottest stock in a hot tech market driven by the rapid adoption of Artificial Intelligence (AI) technology. Nvidia is up roughly 230% since this time last year, while the S&P 500 gained about 26%.

It's not just Nvidia that's seen huge gains. The semiconductor industry as a whole has benefited from AI hype. The technology requires massive amounts of data processing and advanced computing that is continuing to push the bounds of what is possible.

Marvell Technology MRVL, another chipmaker, has seen a boost this year, rising about 73%, but the gains have fallen short of Nvidia. Why?

Nvidia, which began as a gaming-focused company, primarily develops Graphical Processing Units (GPUs). These GPUs are at the heart of what makes Large Language Models (LLMs) like ChatGPT work. Nvidia was poised to capture this market immediately.

Marvell's expertise is not in GPUs. Although the company develops and sells a diverse set of products, its specialty is in Digital Signal Processing (DSP) and Application Specific Integrated Circuits (ASICs). Marvell works with a partner, like Amazon's AMZN AWS, to design and develop a bespoke chip to solve a unique problem.

AI Era

Earlier today, Marvell hosted its Accelerated Infrastructure for the AI Era Event in New York City. The event featured presentations and a Q&A session with the senior leadership team, including CEO, Matthew Murphy.

Much of the event was dedicated to explaining new technologies that Marvell has developed – or is just on the horizon – that will allow the company to better position itself in the AI arms race. As AI technology continues to become more powerful, the hardware driving it becomes more complex. Companies, even mega-caps like Microsoft MSFT or Google (Alphabet Inc) GOOGL, often struggle to develop solutions in-house and partnering with Marvell and creating custom ASIC solutions becomes more attractive, even necessary, as the arms race grows.

The leadership team also focused on the company's DSP business and its position as market leader. The technology was, as recently as last year, thought of as starting to become obsolete in the AI space. That sentiment has reversed and they are now expected to continue to play a central role.

ETF

AI, and the semiconductor industry that serves it, are likely to continue to grow rapidly as the technology becomes more widely adopted.

Interested investors can choose between investing in individual stocks as they see fit or opting for a broader vehicle like an Exchange-Traded Fund. Investing in an AI-exposed fund allows investors to access a space they believe in without having to do the exhaustive research necessary to get the best return.

The Spear Alpha ETF SPRX is an attractive option. The fund has performed exceptionally well, up roughly 61% since this time last year. It is actively managed by Ivana Delevska, whose captaincy of the ship has been impressive thus far.

Although the fund is relatively small, it has just north of $70 million in AUM, it has outpaced larger funds like iShares U.S. Technology ETF IYW or Global X Robotics and Artificial Intelligence ETF BOTZ, up about 48.5% and 24.5% in the last year, respectively.

Featured photo by Adi Goldstein on Unsplash