2024 has been quite a year for the market, with the S&P 500 the index stands at 23%. The broader market has grown by more than 53% over the past two years. A big reason for this incredible gain is artificial intelligence (AI). However, many AI stocks now trade at high valuations because investors only see an expanding market for AI and expect AI companies to grow earnings in 2025.
When evaluating stocks, investors always look at future earnings projections, which impact valuations. Stocks large enough and of interest to the wider investor community are usually covered by at least a handful of analysts who specialize in a sector and do their best to project future earnings. The average of these earnings projections is called consensus.
Here are two big chipmakers that Wall Street analysts think can increase their earnings by 178% and 140% year over year. Should you buy?
1. Marvell Technology: 178% projected earnings growth
Marvell Technology (MRVL 4.07%) riding the AI hype to a 90% gain in 2024. According to estimates provided by Visible Alpha, analysts expect the company to post a loss of $1.08 in diluted earnings per share for its fiscal year 2025, which ends on February 3, and after. generate earnings of $0.84 in its fiscal year 2026 for 178% growth in earnings. This growth may explain why at this writing Marvell trades at 71 times forward earnings.
Marvell provides semiconductor infrastructure for data services including AI. The company targets data centers, enterprise networking, transportation infrastructure, consumers and the auto industry.
Marvell generated about 40% of its revenue in fiscal 2024 from providing infrastructure to data centers, which, as many know, is a key part of the AI food chain. Another 22% of revenue comes from the company’s network, and 19% from the carrier’s infrastructure. The growth of AI is expected to drive much more demand for data centers and associated IT infrastructure, which is why investors see a bright future for Marvell.
According to TipRanks, 28 analysts have issued research reports on the company in the last three months, and 26 rate Marvell as a buy. However, the average price implies only 11.4% upside. Despite the company’s strong potential and the growing market in which it operates, I think investors could find better risk propositions elsewhere.
2. Advanced Micro Devices: 140% projected earnings growth
Launched in 1969, Advanced Micro Devices (AMD 3.93%) is another AI stock Wall Street is bullish on this year. The company also builds key AI infrastructure including graphics processing units, accelerated processing units and data processing units. Interestingly, AMD did not have the same dream year as most of its peers, with its stock falling about 13% in 2024.
One problem that AMD has is that it is a direct competitor of the king of AI chips Nvidia. Nvidia’s dominance can be seen in its reported market share of 80% in the AI processor market and 90% in the GPU market, according to Forbes. Nvidia’s gross margin was nearly 75% in its fiscal third quarter of 2025, ended October 27, 2024, while AMD’s gross margin was 50% in its most recent quarter.
While AMD is unlikely to ever compete with Nvidia, just being in the fast-growing AI market may eventually turn AMD into a winner. In recent months, experts have warned about a shortage of AI servers and accelerators, which could last for a few years and give great importance to any company that can provide this type of infrastructure.
Some analysts are concerned that Advanced Micro Devices’ AI revenue guidance is below investors’ expectations. However, analysts still expect the company to grow earnings by 140% from diluted earnings of $1.41 per share in 2024 to $3.38 in 2025, according to Visible Alpha.
According to TipRanks, 31 analysts have issued a research report on AMD in the last three months, and 23 have assigned the company a buy rating. The average price suggests more than 50% upside. A positive earnings surprise or guidance this year could move the stock, so it’s worth a look.