Are Marvell shares just too pricey?

I’m keeping close tabs on Marvell Technology (NASDAQ: MRVL). It shares are up 250% in the last three months, and 338% over one year. As ever, we need to approach with caution.

Marvell designs high-performance silicon chips and networking hardware to power cloud data centres, AI clusters, and 5G networks. It’s a classic ‘picks and shovels’ critical AI infrastructure play.

Inevitably, it’s a gamble on whether AI transforms the global economy, or is a bubble in the making. Marvell is shockingly expensive, with a price-to-earnings (P/E) ratio of 231. But it’s making money, with Q1 revenue jumping 28% to $2.42bn. It must maintain that pace of growth, to justify its P/E. Any slip will be punished.

Marvell has a market cap of $231bn. So it’s far from a trillion-dollar baby yet. On Wednesday (17 June), the Marvell share price hit an all-time high of almost $330, on hopes of a big order from Amazon. But that’s not in the bag. I’m sorely tempted, but this could be a bumpy ride. That’s true across the sector.

Should I buy Ciena stock?

Networking systems and software developer Ciena (NASDAQ: CIEN) is flying even higher. Its shares are up 463% in the last year. Unsurprisingly, they have an even higher P/E of almost 292. However, the forward P/E is just 82, which suggests that earnings should keep barrelling along. At this valuation, they’d better.

Ciena is another AI infrastructure play, as it helps telecom and cloud providers handle the immense traffic surges generated by AI applications. With demand outpacing supply, it has plenty of pricing power.

Q1 revenue jumped 33% year on year to $1.43bn. And it forecasts full-year revenue will climb 28% to $6.1bn, up from 19% last year.

Again, the risk is that it falls short. If it has to raise further capital to fund its expansion, that could dilute existing holdings. Its shares have been volatile in the past. It’s a smaller player than Marvell, with a market cap of $68bn. I’m tempted.

Is Soundhound just too risky?

Soundhound AI (NASDAQ: SOUN) is a relative minnow with a market cap of just $3bn. And in another contrast, its shares have done badly, actually falling 25% in the last year. Is this an opportunity or a threat?

Soundhound is a voice AI specialist. Think Alexa, but its white label product is designed to be customised by other businesses. It attracted a lot of early-stage AI hype, and revenues have been rising strongly, with Q1 figures showing a 52% rise to $44.2m.

There’s a problem though. As nerves jangle, investors want to see profits too. Soundhound is still posting net losses, and Q1’s was bigger than expected. Another danger is that one of the big players will basically eat its lunch. This is high risk, high reward.

All three are worth considering but only by investors who fully understand the risks. Many companies aspire to be the next Nvidia, but they can’t all get there.

Should you invest £5,000 in Marvell Technology right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

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.

The post Can these 3 thrilling AI stocks become S&P 500 tech giants like Amazon, Apple and Nvidia? appeared first on The Twelfth Magpie.

The obvious question now is whether investors have missed the opportunity. After such huge gains, can these AI leaders continue climbing, or has too much optimism already been priced into their shares?

Let’s take a look at the numbers.

How much could this winning AI investment have made?

The scale of the AI rally has been remarkable.

An investor who bought £10,000 of both stocks at the start of the year would be sitting on a chunky pot worth £36,200. And considering we are still in the first half of 2026, that is truly incredible.

That’s the kind of return that can dramatically alter a Stocks and Shares ISA or SIPP portfolio.

These kinds of returns used to be limited to tiny high-risk penny stocks. But Arm Holdings and Marvell Technology are technology giants worth $447b and $253b respectively.

The reason behind these gains is straightforward. AI infrastructure spending has exploded. Technology giants are investing billions in data centres, networking equipment, and chips that run increasingly sophisticated AI models.

Arm and Marvell may not be household names, but they both occupy important positions in the AI ecosystem. Arm is actually a British chip designer based in Cambridge.

Meanwhile, Marvell provides the networking and connectivity solutions needed to move vast amounts of data around AI infrastructure.

Still the top stocks to buy today?

Nvidia’s CEO Jensen Huang recently declared Marvell as the “next trillion-dollar company”. If his projection proves to be correct, investors would see a fourfold return if they were to invest in Marvell shares today.  

Marvell focuses on the infrastructure behind AI. What I find particularly attractive about Marvell is its exposure to multiple AI growth drivers. For instance, it benefits not only from AI training, but also the networking requirements needed to support future AI technology.

It’s a business with strong sales and profits. With its return on capital employed of 17% and healthy profit margin, I would consider it to be a high-quality share.

Can high expectations be met?

But expectations for future growth are high. If AI spending growth slows or if customer demand fails to meet lofty expectations, the highly valued shares could experience significant volatility.

The same risks apply to ARM. In fact, I would argue that ARM is the slightly riskier proposition with an even loftier valuation. Also, a large proportion of Arm’s licencing sales come from a relatively small group of customers. If key partners reduce orders or develop alternative technologies, future sales growth could be affected.

For investors looking at AI and wondering if they’ve missed the boat, I think AI adoption still appears to be in its early stages.

All things considered, I’m optimistic. I already have enough exposure to the sector, but with careful position sizing and diversification, investors should consider adding both to their stocks-to-buy list.  

Should you invest £5,000 in Arm Holdings right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Arm Holdings made the list?

Harshil Patel does not hold positions in the companies mentioned.

The post Up over 250%, are these AI names still among the top stocks to buy? appeared first on The Twelfth Magpie.

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?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

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.

The post Up 297% and heading for the S&P 500! Is this US tech stock the next Nvidia? appeared first on The Twelfth Magpie.

Should I buy the stock on the back of Huang’s bullish stance? Let’s discuss.

What exactly did Huang say?

During a keynote appearance at the Computex 2026 trade show in Taipei on 2 June, Huang emphasised that Marvell’s networking and connectivity chips are going to be essential for handling AI workloads as data centres scale up. His view is that high-speed connectivity is going to be a critical bottleneck and that Marvell is uniquely positioned to solve the challenge.

It’s worth pointing out that his endorsement follows a strategic partnership between the two companies announced in March. Here, Nvidia invested $2bn in Marvell to integrate its technology into the Nvidia NVLink Fusion ecosystem.

Time to take a closer look at Marvell?

Now, up to now, I haven’t followed Marvell Technology that closely. One reason for this is that the company has struggled with profitability in recent years and I tend to focus on (and invest in) tech companies that are profitable.

Given Huang’s comments, however, I feel that I need to take a closer look at it. After all, the Nvidia boss has had an incredible level of success with AI to date (and made me a lot of money in the process).

Huge growth

Looking at the growth here, it’s certainly impressive. Last financial year (ended 31 January), revenue rose 41% to $8.2bn.

This financial year, analysts forecast top-line growth of another 40%. Next year, they anticipate growth of 44%.

What’s fuelling the growth?

As for what’s driving this growth, it’s two things.

First, there are Marvell’s custom AI chips. Like Broadcom (which I have shares in), Marvell works closely with AI giants to design custom application-specific integrated circuits (ASICs) designed to run specific internal artificial intelligence workloads more efficiently than standard processors.

Second, there are its optical interconnects and networking solutions that move data quickly. Here, Marvell is a market leader in chips that convert electrical signals from computers into light signals to shoot data through fibre-optic cables at blazing speeds (enabling massive clusters of GPUs to function as single, unified entities with minimal latency).

Rising profits

But it’s not just a growth story today. Because this company is now profitable.

Last financial year, net profit was $2.7bn. This financial year, analysts are looking for $3.6bn, that is, 33% growth.

This profitability means that the company now has a price-to-earnings (P/E) ratio. It stands at about 70, looking at the earnings per share (EPS) forecast of $4 for this year.

That’s pretty high (for reference, Nvidia is on 23). However, the ratio falls to 46 when we use next year’s EPS forecast.

Should I buy?

Given the high valuation, I’m not going to buy Marvell shares today. The way I see it, the valuation doesn’t leave any room for error (like a temporary slowdown in growth or an earnings miss).

This AI stock is definitely on my watchlist though given Huang’s comments. If it has a decent pullback, I may snap it up for my portfolio.

Should you invest £5,000 in Marvell Technology right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Marvell Technology made the list?

Edward Sheldon owns shares in Nvidia and Broadcom.

The post Should I buy Nasdaq stock Marvell after Jensen Huang said it could be the next $1trn company? appeared first on The Twelfth Magpie.

But this week, Nvidia CEO Jensen Huang tipped Marvell Technologies (NASDAQ: MRVL) to be “the next trillion-dollar company“. The endoresment prompted the stock to surge 20% on Tuesday (2 June 2026).

That’s no small development, and one I couldn’t help taking a closer look at.

Why the endorsement?

I’ve always thought of Marvell as a competitor to Nvidia, which makes the endorsement all the more interesting. But of course, there’s more to the story.

Huang’s comment comes on top of a strategic $2bn partnership that effectively makes Marvell a core part of Nvidia’s AI ‘factory’ stack.

What it provides are custom accelerators and high‑speed networking that moves data around data centres rather than doing the actual model training. Huang says these interconnect and connectivity chips are now critical because AI systems rely on thousands of processors talking to each other at very high speed.

In other words, if GPUs are the brains of AI, Marvell is developing the nervous system that links them.

How are the numbers looking?

Marvell’s recent results certainly don’t disappoint. In its Q4 2026 results, it reported record revenue of about $2.22bn, slightly ahead of expectations. Data centre sales reached $1.65, up more than 20% year on year. 

Management has guided for first‑quarter fiscal 2027 revenue of roughly $2.4bn, again centred on strong data‑centre demand. For me, that’s the real story behind the headline hype.

But hype brings with it another beast: high valuation.

The high price of success

Marvell stock is anything but cheap. The shares are trading on a trailing price‑to‑earnings (P/E) ratio in the mid‑90s: a rich multiple even by high‑growth tech standards.

Price‑to‑book (P/B) sits high as well, with some data sets showing up to 10 times book value, reflecting how much growth is already priced in.

Profitability and leverage look more reasonable. Return on equity (ROE) is around 18%, with $2.5bn of net profit against roughly $14bn of equity — ahead of the broader industry.

The balance sheet shows total debt of $5bn and equity above $18bn, implying a debt‑to‑equity ratio of 0.3 — more than manageable for a business with growing cash flow.

So it’s living up to the hype. But it’s not risk free.

Buy the rumour, sell the news

The biggest risk, in my view, is that expectations now look very stretched.

CNBC’s Jim Cramer summed it up neatly when he said of the post‑Huang surge:

I find this concerning. These are substantial fluctuations, and they are driven solely by one individual’s statement.

If sentiment cools, a high‑90s P/E multiple can compress quickly. Competition is intense too, from Nvidia itself, from Broadcom, and from hyperscalers developing their own in‑house chips.

My verdict?

There’s no denying that Marvell is closely involved with one of the most exciting parts of the AI boom — and has real numbers to show for it.

But the share price has sprinted far ahead of the wider market. Investors considering the stock need to be comfortable with volatility and long‑term AI infrastructure risk.

So am I going to throw everything into it? Not a chance.

But I’d say it’s worth considering a small position with the aim to build slowly, rather than piling in after one headline‑driven spike.

Should you invest £5,000 in Marvell Technology right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Marvell Technology made the list?

Mark Hartley does not hold any positions in the companies mentioned.

The post Nvidia’s CEO thinks this company could hit $1trn! Should I add it to my list of stocks to buy? appeared first on The Twelfth Magpie.

It’s not a lottery win. It’s not inheritance. There’s no secret.

So how does it actually work?

Compounding for glory

The maths is simpler than it sounds. In the early years, not much seems to happen. Year one, the £10k earns roughly £1,330 in interest. Underwhelming. But here’s the thing — that interest doesn’t disappear. It gets added to the pot. Next year, the interest earns interest. The year after that, the same. Each time the snowball rolls, it picks up a little more snow.

By year 10, the annual interest generated is around £9,000. By year 20, closer to £24,000 — more than the £6,000 in contributions going in that year. By year 30, the pot is generating over £120,000 in a single year. The contributions become almost irrelevant. The compounding has taken over.

Of the £1.33m final figure, only £190,000 represents actual money paid in — the £10k lump sum plus £500 a month for 30 years. The remaining £1.14m? Pure compounding. Time doing the heavy lifting. This is why I think it’s so important that if parents can, they should start an ISA or SIPP for a child at birth. They’ve got so much compounding ahead.

The SIPP wrapper makes it even more powerful. Unlike the ISA, basic-rate taxpayers get 20% tax relief on contributions, meaning that £500 a month only costs £400 out of pocket. Higher-rate taxpayers can claim back more still.

The catch, of course, is patience. As we can see compounding is brutally slow at the start and almost unbelievably fast at the end. The investors who benefit most are the ones who start early and contribute consistently.

What’s more, not everyone achieves 10% per annum. At 5%, for instance, the returns would be significantly lower.

Where to invest?

This is the most important question. The above is great in theory, but we need to find the stocks to do the job.

One name catching my eye as a possible pick for a long-term SIPP portfolio is Marvell Technology (NASDAQ:MRVL), a chipmaker that’s the essential plumbing for the AI revolution. The headline valuation isn’t great, which sounds alarming. But dig a little deeper and there’s an interesting case to make.

The forward price-earnings-to-growth (PEG) ratio sits at just 0.73, against a sector median of 1.4 — a massive discount and one of the few metrics where Marvell looks genuinely cheap relative to peers. But it’s the one that matters the most to me. That suggests the market may not be fully pricing in the company’s growth potential.

The risk? Marvell is heavily dependent on a small number of hyperscaler customers — Amazon, Microsoft, Google — for the bulk of its custom AI chip revenue. If any one of those relationships sours, or a hyperscaler decides to bring chip design fully in-house, the revenue hit could be severe.

Yet for patient SIPP investors with a 30-year horizon, I feel it’s well worth considering.

The post £10k in a SIPP today could be worth £1.33m in 30 years — with a bit of help appeared first on The Twelfth Magpie.

And if it’s done in an ISA, all of the income will be free of tax. You’d need to earn approximately £55,000 per year from a salaried job to take home this much after tax.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

This is the real beauty of the ISA. It allows returns to compound undisturbed by the taxman, accelerating long-term wealth creation and making high levels of passive income far more achievable.

Over time, the difference between tax-free and taxed returns can run into tens or even hundreds of thousands of pounds, especially for higher-rate taxpayers.

So, how much would an investor need in an ISA to earn this £40,000 per year?

Using a relatively cautious 4% income rate, an ISA would need to be worth around £1m.

At 5%, the required portfolio falls to roughly £800,000, while a 6% yield would bring it down to about £667,000.

However, it’s important to remember that higher yields are often less sustainable. A few years ago when the market was depressed, it was much easier to lock in big yields.

Today, some of those dividend stocks are trading much higher and the dividend yields (which are linked to to share prices, moving in the opposite direction) have fallen.

Building the portfolio takes time

With an annual ISA contribution limit of £20,000, it’s clear that you can’t build an £800,000 portfolio overnight. But when using half the allowance, an investor could theoretically get there in 25 years.

Knowing where to invest

As I said above, the theory is easy. Actually investing in the right stocks, trusts, funds, bonds etc, is the hard part.

At The Motley Fool, my peers and I believe the best way to build a portfolio for the long run is by choosing well-researched stocks.

And for me, that means starting with the raw data or running screens.

One stock that stands out from a valuation perspective is American chipmaker Marvell Technology (NASDAQ:MRVL).

Marvell stands out because its valuation looks far more attractive once growth is taken into account. While headline price-to-earnings (P/E) multiples appear elevated, the forward price-to-earnings-to-growth (PEG) ratio of 0.74 is less than half the sector median, suggesting the market is underpricing its earnings growth.

That matters far more than raw multiples for a company exposed to long-term data centre and AI demand. Crucially, this valuation is backed by a strong balance sheet, with modest net debt relative to a $72bn market capitalisation, giving Marvell flexibility to invest through the cycle.

Risks? Well it needs to execute to justify its higher P/E — 29 times. And the issue is that its ASIC — the specialised chips (not GPUs) used in servers and data centres — positioning is weaker than Broadcom.

Nonetheless, I definitely think it’s worth considering. Current forecasts suggest the forward P/E would drop to 11 times for 2029. That looks cheap for the sector.

The post How much do you need in an ISA for a £3,333 monthly second income? appeared first on The Twelfth Magpie.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Berkshire Hathaway

What it does: Berkshire Hathaway is a diversified conglomerate including insurance, utilities, and railroad operations.

By Stephen Wright. Despite the US stock market looking slightly expensive at the moment, one stock stands out to me as a buying opportunity. It’s Berkshire Hathaway (NYSE:BRK.B). 

When I’m looking for shares to buy, the most important thing is a business that has a long-term competitive advantage. And Warren Buffett’s company fits the bill. 

Berkshire’s subsidiaries operate in a number of regulated industries, including insurance, utilities, and railroads. And as Buffett pointed out, this brings risk as regulators aren’t always predictable.

Nonetheless, all three are businesses where demand is highly predictable, even if regulation isn’t. And the barriers to entry for competitors are extremely high.

Trading at a price-to-book (P/B) ratio of 1.57 while earning a return on equity in excess of 18%, I think the stock is good value. That’s why its my largest stock investment and one I plan to continue buying.

Stephen Wright owns shares in Berkshire Hathaway.

Boston Scientific

What it does: Boston Scientific is a global medical device manufacturer. Their products tackle a wide range of medical conditions from heart disease to urology.  

By Harshil Patel : I reckon one of the best US stocks in the healthcare field is Boston Scientific (NYSE:BSX). This medical device manufacturer is going from strength to strength. It recently reported a strong first quarter with sales exceeding expectations.

Sales jumped by 15% versus the first quarter of 2023, driven by an innovative portfolio of products. It launched nearly 90 new products last year.

For companies to grow sales, innovation is one of the most important factors to consider. And Boston Scientific invests in research and development to create innovative new products and solutions.

One standout sector that I’d mention is Electrophysiology, which grew its sales by a whopping 72%. The jump was driven by encouraging adoption of its Farapulse platform.

Bear in mind that this industry is highly regulated. And Boston Scientific faces risks from both regulatory compliance and lawsuits.

That said, in the long term, an ageing population and other lifestyle factors are likely to support its growth.

Harshil Patel does not own shares in Boston Scientific.

DraftKings

What it does: DraftKings runs daily fantasy sports competitions and provides online sports betting services.

By Charlie Carman. DraftKings (NASDAQ:DKNG) is a relatively young company operating in a new market — online sports betting in the USA.

Since the Supreme Court lifted a federal ban in 2018, individual states have rushed to legalise the practice. DraftKings now has a presence in 27 of those markets.

With votes on sports betting due over the coming years in populous states like California, Florida, and Texas, there’s significant potential for further expansion.

Crucially, DraftKings is performing well across key growth metrics. Monthly unique players soared to 3.5m in Q4, representing a 37% year-on-year increase, and 2024’s revenue guidance has been lifted to a midpoint of $4.78bn.

Granted, DraftKings is still unprofitable, and competitive pressure from Flutter Entertainment and Entain poses risks for the firm’s market share.

Nonetheless, I think this market will be big enough to accommodate several major players and DraftKings looks well-positioned to benefit from further growth in the industry.

Charlie Carman owns shares in DraftKings. 

Marvell Technology

What it does: Delaware-based chip manufacturer that designs and produces semiconductors and related technology.

By Mark David Hartley. Despite a $55bn market cap and $64 share price, Marvell (NASDAQ:MRVL) is a small player in the booming semiconductor market. Unlike AMD and Nvidia, it doesn’t publicly retail under its own brand but supplies components to other tech firms in the artificial intelligence (AI) field. I’ve been invested for a while with little to report but now it looks ready to take off. Earlier this month, Bank of America reiterated its buy rating on the stock with a price target of $95. Other analysts on average eye an $88 target. 

Unfortunately, Marvell’s profits are very much tied to the success of the wider tech industry, so any falter there could hit it hard. AI is still a nascent industry running on a lot of speculation, so it falls in the ‘high risk/high reward’ area of investing. I like Marvell’s prospects but I’d balance it out with other stable stocks.

Mark David Hartley owns shares in Marvell Technology, Nvidia, and AMD.

Palo Alto 

What it does: Palo Alto Networks markets itself as the world’s cybersecurity leader, via the provision of security tools.

By Jon Smith. When looking across the pond, I’m a big fan of Palo Alto Networks (NASDAQ:PANW). I bought the stock last month after the share price dipped following worse than expected results in February.

Even with the tumble following results, the stock is still up 61% over the past year. This speaks to the increase in demand for cybersecurity. I also bought this as a way to get exposure to artificial intelligence (AI). The rise in AI means that more complex cyber scams are occurring. Therefore, companies like Palo Alto that are developing products for this should benefit from higher demand.

A risk is the high benchmark of expectations that investors have. For example, the quarterly results in February were good (revenue jumped 19% year-on-year) but just not as good as the lofty expectations. Even with this, I think the scope for significant growth in coming years is there.

Jon Smith owns shares of Palo Alto.

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