Top 10 AI Stocks in the Spotlight This Week has recently been published. This article will review Marvell Technology, Inc. (NASDAQ:MRVL) in comparison to other leading AI stocks highlighted this week.
Morgan Stanley, an investment firm, has indicated that electricity demand will remain strong even in the face of potential recessionary impacts from Trump’s tariff policies. The firm notes that data centers require significant power, and their demand will not wane, even during economic downturns or due to efficiency improvements from companies like Ant Group and DeepSeek. While industrial demand may experience a slight decline in the short term, the reshoring of manufacturing to the U.S. is expected to mitigate these effects.
“We believe power demand trends are more durable than in prior cycles, especially given the inelastic nature of demand from data centers. Even if industrial demand diminishes temporarily, the reshoring trend will provide long-term support.”
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Bloomberg reports a forecast predicting a 20-40% surge in U.S. power demand from data centers by 2025, with double-digit growth likely continuing through 2026-2030. Although Morgan Stanley recognizes that rapid changes in policy might significantly impact large capital investments, they also project that electricity consumption due to artificial intelligence will increase tenfold by 2028.
“We do not wish to downplay the possibility of a short-term demand shock, as this could lead to reduced order growth for certain companies.”
Historical data indicates that energy stocks have consistently shown resilience during economic downturns, with an average demand decline of only 0.2% since 1960 during such periods. The firm indicated that utility companies tend to perform well in recessions due to their stable nature.
Furthermore, there is optimism surrounding increased spending on AI infrastructure from major technology firms like Meta, Amazon, and Alphabet, which are seeking to lead in the AI space and have extensive product pipelines requiring GPUs. For the purpose of this article, AI stocks were picked through news analysis and press releases, with particular interest in those favored by hedge funds, with data as of Q4 2024.
We focus on stocks that hedge funds are investing in because research has demonstrated that mirroring the top picks from leading hedge funds can yield market-beating returns. Our quarterly newsletter recommends 14 stocks per quarter, achieving a return of 373.4% since May 2014, significantly surpassing its benchmark by 218 percentage points (more details here).
Overall Evaluation: Marvell Technology, Inc. (NASDAQ:MRVL) has been placed 8th on the list of highlighted AI stocks. While MRVL is considered a viable investment opportunity, we believe other AI stocks may offer greater potential for higher short-term returns. For those interested in a promising AI stock trading at less than 5 times its earnings, check out our report on the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
