Dear Friend,

Goldman Sachs just published a number that should terrify every AI investor.

40%.

That's how many AI data centers will be crippled by electricity shortages by 2027.

Not chip shortages.

Not funding problems.

Power.

Demand is growing 15% per year — and the grid can't keep up.

Entire facilities are sitting idle right now because they can't get enough electricity online fast enough.

But buried in that same report is the answer.

One small company makes the exact equipment these data centers need to solve the power crisis. They're sitting on $1.5 billion in orders. Their hardware is in Musk's Colossus. It's in data centers across the country.

And the stock is still trading like a sleepy industrial name nobody's heard of.

Goldman told you the problem. Dylan Jovine found the solution.

He's giving away the name and ticker — free.

See the stock that solves AI's biggest crisis >>

"The Buck Stops Here,"

Kelly Maguire
Behind the Markets

MaxLinear’s Explosive 200% Rally Looks Impressive—But Can It Last?

Authored by Dan Schmidt. First Published: 5/1/2026.

Don’t worry, Joe DiMaggio, your 56-game hitting streak is safe. The iShares Semiconductor ETF (NASDAQ: SOXX) recently saw its own streak end at 18 straight days, during which it gained more than 30%. The SOXX fund holds 30 of the largest semiconductor companies, and its recent rally underscores the semiconductor industry's surge. Beyond the fund's 30 large holdings, however, some smaller, lesser-known companies have delivered even better returns.

One of these small chip stocks is MaxLinear Inc. (NASDAQ: MXL), a circuit maker with broadening exposure to the insatiable data center industry.

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MXL shares recently jumped more than 80% following earnings, and the company is now on the radar of investors and analysts thanks to its optimistic guidance. However, the stock is up about 300% year-to-date (YTD), and the valuation is suddenly very elevated. Is MaxLinear still a buy, or is it time to take profits and let the momentum settle?

Q2 Guidance Projects Sustained Growth in Key Divisions

MaxLinear reported its Q1 2026 earnings on April 23, and the stock price reaction initially puzzled investors. The company posted a top- and bottom-line beat, but the numbers were only slightly above analysts' projections and certainly didn’t seem to warrant an 80% after-hours pop. The real reason for the enthusiasm was in the report's details, which showed revenue accelerating in the all-important infrastructure division.

The company’s revenue rose 43% year-over-year (YOY), primarily driven by a 136% surge in its optical data center platforms. This puts the infrastructure segment ahead of the broadband segment for the first time in MaxLinear’s history and repositions the company as an AI tech sector play rather than a nondescript broadband chipmaker.

The Q2 2026 guidance is what really sent the stock into the stratosphere. The Q1 earnings beat was solid, but the forward outlook suggests this isn’t a one-time boost. Management projects Q2 revenue between $160 million and $170 million, and full-year data center revenue between $150 million and $170 million, with gross margins potentially topping 60%. These projections extend MaxLinear’s growth story through 2027.

Valuation Becoming a Concern Amidst Soaring Stock Price

While the guidance is impressive, MaxLinear could be growing up too fast. Despite surpassing a $4.5 billion market cap, the company generated just $467 million in sales over the last 12 months, and its net margins remain negative. Gross margins of 60% with net margins of -26% indicate the company is still struggling to turn revenue into actual profit, and the stock currently trades at more than 10 times sales. The forward price-to-earnings (P/E) ratio of about 60X is also nearly double the semiconductor industry average, suggesting MXL stock is already pricing in near-perfect execution.

Perfect execution is a high bar for a company that continues to struggle with profitability and cash flow, and even the most optimistic analysts have price targets hovering near the current market price. Needham and Company LLC and Roth MKM both upgraded the stock to a Buy, with matching price targets of $60, but that leaves limited upside even as the post-earnings surge begins to unwind. Ownership has also been sitting on the sidelines; insiders have been net sellers of MXL shares since Q4 2024.

Technical Signals Point to an Overbought Rally in the Short Term

In addition to a concerning valuation, the MXL rally is starting to look tired from a technical standpoint. The parabolic post-earnings pop was immediately followed by a bearish engulfing candle, which occurs when a large red candle “engulfs” the previous day’s green candle, a common bearish reversal signal. The Relative Strength Index (RSI) is also extremely overbought near 80 and hasn’t been below 70 since the second week of April. The Moving Average Convergence Divergence (MACD) remains in an uptrend, but the MACD line and signal line are drifting apart in a way that suggests volatility will remain elevated in the short term.

MaxLinear’s pivot to AI infrastructure has driven a massive share rerating, and its optimistic guidance has sparked a wave of analyst upgrades and price target increases. But with great gains come great responsibility. MaxLinear’s growth prospects need to be executed flawlessly to justify its suddenly sky-high valuation, and it's competing with larger, better-capitalized companies like Broadcom Inc. (NASDAQ: AVGO) and Marvell Technology Inc. (NASDAQ: MRVL).

The company doesn’t report Q2 earnings until late July, so the next catalyst to support the valuation is still some time away. In the meantime, technical signals strongly suggest the pullback could continue in the short term, especially given the overbought RSI. Investors may be wise to wait for a lower entry point before opening new positions.