Artificial Intelligence (AI) Servers Are Set to Become a $187 Billion Industry in 2024: 2 Hot Stocks That Are Set to Soar Thanks to This Massive Opportunity

Industry Overview - The global AI server market is projected to reach $187 billion in revenue in 2024, representing a 69% increase from 2023 [1] - Significant investments from cloud service providers in AI infrastructure are driving the demand for AI servers [1] Company: Micron Technology - Micron Technology's high-bandwidth memory (HBM) chips are in high demand, with the company reporting that it has sold out its entire capacity for 2024 and 2025 [3][4] - The new HBM3E chip is expected to consume 20% less power and provide 50% more capacity compared to competitors, with production ramp-up planned for early 2025 [4] - Micron aims to capture 20% to 25% of the HBM market by next year, anticipating HBM market revenue to grow from $4 billion in 2023 to $25 billion in 2025 [4] - Revenue for Micron is expected to increase by 52% to $38 billion in the current fiscal year, with earnings projected to rise from $1.30 to $8.94 per share [5] - The stock is considered undervalued with a forward earnings multiple of 11 and a PEG ratio of 0.16 [6] Company: Marvell Technology - Marvell Technology specializes in application-specific integrated circuits (ASICs), which are increasingly in demand as cloud service providers develop in-house processors [7] - ASICs are projected to account for 26% of the AI server chip market in 2024, with a potential revenue opportunity of $150 billion [7] - Despite a 5% year-over-year decline in overall revenue to $1.27 billion, Marvell's data center revenue surged by 92% to $881 million [8] - The company expects its data center business to grow in the high teens sequentially, improving from 8% sequential growth in the previous quarter [9] - Marvell anticipates revenue of $1.45 billion in fiscal Q3, up from $1.42 billion in the same quarter last year, signaling a return to growth [10] - Analysts project Marvell's earnings to grow at a compound annual growth rate of 21% over the next five years, driven by the demand for custom AI chips [10]