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It has been said that “imitation is the sincerest form of flattery.” Although that truism may have once applied to fashion designers following and duplicating the hottest new trends in clothing, it could also apply to investors. Stock traders are notorious for mimicking successful investment strategies and if you’re one of them, JP Morgan’s recent upgrade of Marvell Technology may interest you. Seventy hedge funds are also invested in this stock. Keep reading to discover why.

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Marvell Technology (Nasdaq: MRVL) is one of the many companies that has thrived in the ecosystem created by the AI revolution. The company makes high-performance semiconductors geared toward serving data centers. It’s no secret that a race is underway to see which Big Tech outfit can create the smartest, fastest and most reliable AI. Data centers and semiconductors are key elements in that race.

Since Marvell Technology’s products help data centers store information in larger quantities and access that data more efficiently, it is poised to be a key player in AI’s ongoing development. JP Morgan analyst Harlan Sur certainly thinks so. He recently elevated his price target for Marvell from $90 to $130, predicting the stock will increase by nearly 50%.

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Sur’s bullish upgrade on Marvell is partly motivated by the extent to which the company’s strong Q3 2024 exceeded analysts’ expectations. Marvell reported sales of $1.52 billion, a significant improvement on the consensus analyst expectation of $1.46 billion. A large portion of Marvell’s surge in sales is due to the popularity of its bespoke AI accelerator chips for hyperscale data center builders.

Hyperscale data centers are mission-critical assets in the quest to harness AI’s power and several tech titans are actively building them. On Marvell’s Q3 2024 earnings call, CEO Matt Murphy revealed that his company had secured deals to provide semiconductors for hyperscale data center projects by Google and Amazon. This should translate to a generous market share and solid long-term revenue for Marvell.