By Michael Cintolo, Vice President of Investments, Cabot Wealth Network
Marvell Technology (MRVL)
The AI bull market has been a rolling one, with different areas leading over time, and we think Marvell Technology (MRVL) looks like a fresh institutional leader. Management says it has the most comprehensive set of connectivity offerings out there, and they had been expecting growth (which was already solid, revenues up 22% and earnings up 33% in Q4) to accelerate steadily for many quarters to come (with an early 2027 outlook for 40% revenue growth, too). And that was before a $2 billion investment from Nvidia in early April, which will allow Marvell to push more of its customer AI accelerators with Nvidia gear; then came rumors later in the month that Google is looking to sign on with Marvell to develop two custom AI chips to quicken AI training. The bottom line is that growth should pick up in a big way for many quarters to come as Marvell’s connectivity offerings are gobbled up by hyperscalers and big enterprises; analysts see earnings leaping 35% this year and 42% next, but most see that as conservative given how things go in the industry and how big the spending is by many players in the AI build-out. Shares actually broke out just a couple of days after the market low in late March and have put on a stunning show, galloping higher last month—but, while near-term wobbles are possible or even likely, it’s also likely this powerful move is the start of a larger advance—we’re not opposed to starting small and building a position as MRVL has all of the qualities of a real leader.
Sociedad Quimica (SQM)
Chilean firm Sociedad Quimica specializes in the production of some of the world’s most strategically important chemicals, including iodine and various plant nutrients, as well as key industrial commodities like lithium. A combination of the growing need for lithium to support electrification and the energy transition, plus the fertilizer market shock as a result of the crisis in the Strait of Hormuz (where more than a third of global fertilizer passes through), is boosting the company’s prospects. Lithium is Sociedad’s most important growth engine, as after a lull in pricing for a couple of years, the worldwide demand for the energy mineral is being driven by rising EV and energy storage system use, leading to record lithium sales for the company in late 2025 and early 2026. In last year’s Q4, the firm saw a 50% year-on-year sales volume surge in its lithium business, which came as Sociedad integrated its recent partnership with Chilean copper/lithium producer Codelco. Industry analysts are predicting up to a 30% increase in global lithium demand this year, with possible supply deficits emerging, which should further goose growth for Sociedad. Elsewhere on the fertilizer front, Sociedad’s Specialty Plant Nutrition segment is expected to remain a vital area of growth this year as accelerating worldwide demand for high-quality, chloride-free fertilizers—especially in North America and the Asia-Pacific region—is creating momentum for potassium sulfate and potassium nitrate (which can often be used to replace traditional potash while protecting chloride-sensitive crops from excess salinity). Demand aside, fertilizer prices are soaring in the wake of the Iran war after already being up by as much as 20% entering 2026, underscoring the tightening supply situation even before the conflict started, which should provide an extra boost to Sociedad’s bottom line as margins expand. Business has been accelerating the past couple of quarters, with Q4 seeing revenue up 23% and earnings up 52%, and analysts see the boom continuing through this year as the bottom line soars toward $6 per share while the top line lifts more than 60%. Also helping the cause is a proposed 50% payout of last year’s net income (likely resulting in a big dividend coming down the pike). Just as important, SQM embarked on a great initial run last fall and into January, then based out for three months—and is now back in gear on the upside as big investors accumulate positions ahead of the likely earnings boom.
Steel Dynamics (STLD)
Steel Dynamics is a major producer of the carbon steel used for making buildings, bridges, rails and other infrastructure. As such, it’s benefiting from this year’s strength in the domestic industrial construction and infrastructure build-out trends, with (you guessed it) data centers and AI-related demand also providing a tailwind. Indeed, in recent commentary, the company has cited data centers as a key end-market for driving its impressive backlog growth, with materials for data center construction, as well as cooling and mechanical systems and power infrastructure helping to goose demand. Aside from being used for wide-flange beams, structural shapes and joist/decking systems for the rapid construction of high-strength data center shells, the company’s electric arc furnace (EAF) steel (which has a lower carbon footprint and higher operating leverage in tight steel markets) is also used to build the structural components of cooling towers and HVAC systems, supporting effective heat management for those centers. Beyond steel, rolled and finished aluminum is fast becoming a major sales driver for the company after its wholly owned subsidiary, Aluminum Dynamics, ramped to full production earlier this year. (Underscoring its rapid growth, that business is expected to reach a 90% capacity utilization rate by the end of 2026, with up to 70,000 tons in shipments projected for Q2.) The company’s foray into aluminum is part of its strategy to address a growing North American supply deficit of the metal, partially thanks to the can and automotive industries (which carry higher margins for the company). The Q1 report was the reason for the stock’s latest show of strength, with revenue of $5.2 billion increasing 19% year-on-year (fastest growth since Q2 2022) and earnings of $2.78 nearly doubling. Management said the improved steel market environment is supported by manufacturing re-shoring and infrastructure program funding, with “strong” multi-family homebuilding and energy sector activity leading to its pipe mills being booked “well into the summer.” Looking ahead, analysts see earnings soaring 86% this year, which is keeping buyers interested: STLD staged a long-term breakout last fall and ran up beautifully into February before correcting with the market. But it’s back on the upswing now, with the Q1 report pushing the name to new highs—we think there’s more upside to come.
TeraWulf (WULF)
TeraWulf is one of many Bitcoin miners that’s doing a hard pivot to AI datacenter construction, essentially being a landlord and renting out big spaces with contracted power and advanced wiring for AI (and often hyperscaler) clients. Its first project is delivering high-performance computing to AI company Core42: The agreement calls for 360 megawatts (MW) of IT infrastructure at its Lake Mariner complex in upstate New York. A credit line of $3.2 billion of financing for the facility has been extended to TeraWulf by Google, and when the full center is up and running, it should produce around $670 million in revenue for TeraWulf annually. The project is split into five phases, with the first two phases now up and running. Next up is converting the mothballed Morgantown, Maryland, coal plant in the power-constrained Washington, D.C., area to a mostly green energy AI data center, with designs to make the plant a net contributor of energy to the grid. Phase one of the project calls for 500 MW for the data center power, another 500 MW for power generation it can opt to send to the grid and 250 MW of battery storage. In Kentucky, TeraWulf is going to build a 480 MW data center for which it claims to have interest from every major hyperscaler to utilize. Because TeraWulf is moving to AI from crypto-mining data centers, past performance reflects almost all Bitcoin activity. Last year the business pulled in $169 million in revenue, generating a loss per share of $1.66. But the future looks very bright: Q1 revenue was pre-announced between $30 and $35 million with EBITDA in the black, but the year as a whole should see $330 million in the top line, followed by a boom to nearly $1 billion in 2027. Long term, the firm thinks it can open and ink 250 MW per year of new capacity, so the long-term cash flow profile should be very strong, assuming AI infrastructure spending remains on the upswing. Shares are lower-priced and volatile, but they held up great after a big run in recent months and then lifted to new highs soon after the market turned up.
Vertiv Holdings (VRT)
A couple of years ago, Vertiv was an upstart in the AI infrastructure realm, but now it looks like the key cog in the build-out, thanks in large part to the firm’s various cooling systems and offerings that allow all the new high-powered data centers being put up to operate at maximum efficiency, though the firm also does good business in power management (power supply and distribution gear within a data center), integrated systems (pre-configured bundles of networking, cooling and IT racks that cut deployment time) and services (which is growing nicely as all the systems it places lead to recurring service needs). In the recent Q1 report, the numbers were solid (organic sales up 23%, earnings up 83%), with management relaying many positive tidings, including that “customer conversations [are] different than six months ago; the urgency has increased, the scale and deployment is larger and the technical complexity is creating opportunities for companies that can solve them.” The firm raised estimates for the full year and expects the back half of the year to see some solid acceleration, thanks to capacity additions that will come online in a few months, and much of the huge tally of orders it garnered in Q4 (up 252% from the year before!) will be filled around then, along with pickup in what has been a lagging European business. Vertiv decided not to release quarterly orders and backlog anymore, but even there, the top brass said it has good visibility into 2027 at this point. After a 47% earnings gain last year, Wall Street sees another 50%-plus boom this year, with 35% growth in 2027—all of which are looking conservative given the stampede of buying being done, mainly by hyperscalers but also from some big enterprises. The firm will host an investor conference on May 19th that could move the stock if there’s any long-term outlooks released. Shares broke out nicely in February, held up during the Iran-related market dip and have been acting very well since the market got going again.
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About Cabot Wealth Network
This report is published by Cabot Wealth Network which was founded in 1970 by Carlton Lutts, a disciplined investor with an engineering mind who developed a proprietary stock picking system using technical and fundamental analyses.
Since then Cabot Wealth Network, headquartered in Salem, Massachusetts, has grown to become one of the largest and most-trusted independent investment advisory publishers in the country, serving hundreds of thousands of investors across North America and around the world.
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