Many Britons will be focused on the S&P 500 in the aftermath of the record-breaking SpaceX IPO. Yet right now, I’m wary of buying SpaceX itself.
Elon Musk’s intra-planetary vehicle had a fittingly stellar debut on Friday (12 June). But I suspect the excitement may cool as investors wait for the company to discover its real value.
I have exposure to SpaceX through FTSE 100-listed investment trust Scottish Mortgage, which started building its position in 2018. I won’t buy SpaceX stock directly now. I mostly invest in FTSE 100 shares anyway. But I’m also on the look out for US growth opportunities, and one just caught my eye.
Why are we buying this US growth share?
I’m clearly not the only Briton tempted. Figures from investment platform AJ Bell show that it’s now a top 10 buy among its UK customers.
The company is Marvell Technology (LSE: MRVL). It’s got nothing to do with superheroes but still packs a punch. The Marvell share price is up a stunning 297% in the last year, lifting its market cap $221bn. It’s just about to smash into the S&P 500. That will give it another boost, as the big US tracker funds will have to start buying it too.
On Friday, US broker B Riley reiterated its Buy rating and lifted its one-year price target from $240 a share to $345. Today, Marvell trades at $279. If correct, that would mark a 24% increase from here.
There’s another reason Marvell is on fire. On 2 June, Nvidia chief executive Jensen Huang said it was set to be the “next trillion-dollar company”.
Is this a really useful investment?
Perhaps he was being polite. Huang happened to be sharing a stage with Marvell chief executive Matthew Murphy at a computer conference in Taipei at the time. But Nvidia is putting its money where his mouth is. In March, it pumped $2bn into Marvell saying it would help customers “leverage Nvidia’s AI infrastructure ecosystem and scale”. Huang’s argument? “Useful AI has arrived. It’s the reason your demand is going through the roof.”
Marvell is certainly making useful amounts of money. On 26 May, Q1 results showed revenue climbed 28% year on year to $2.42bn, a new record. It expects $2.7bn in Q2 amid “exceptional AI-related bookings”. It may not be the next Nvidia, but it could be Nvidia-adjacent.
As ever, I’m concerned I’m a little late to this one. I’m also shaken by talk of that AI bubble. I’ve got a confession to make. I just don’t know enough about it at the moment. The same goes with US stock Micron Technology.
That’s up a stunning 719% in the last year, and is even more popular among AJ Bell investors. Its market cap has just topped $1trn. I need to dig deeper before I start drip-feeding money into these two. Anyone who joins me in monitoring Marvell and Micron should know there are risks, but they won’t be the only British investors keeping tabs.
Should you invest £5,000 in Marvell Technology right now?
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And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Marvell Technology made the list?
Harvey Jones owns shares in Nvidia.
