Why This AI Stock Could Be the Easiest 10x Trade of 2026

MaxLinear (NASDAQ:MXL) was a boring broadband chip company until AI data centers started booming. The stock has already surged by 442% in just the past six months, but the rally could end up being monumental if the AI buildout continues as expected.

You may argue that the current forward earnings multiple of 59 times earnings already prices in the growth, but I’d disagree.

If you look at the entire semiconductor industry, a stock trading at 59 times forward earnings is more expensive than 71% of the industry. Thus, MXL isn’t exceptionally expensive when you take growth into account. In fact, I believe it could be a multibagger as early as this year if the rally accelerates or continues. Let’s have a look at why.

MaxLinear’s growth is likely underestimated

MaxLinear is a mixed‑signal communications chip company, and its products are in high demand from the data center buildout, requiring more communications equipment. What makes it special is that it has been consistently under-the-radar and trades with a market cap of just $7 billion.

That’s despite its family of high‑speed PAM4 DSPs targeted at data center optics, plus supporting components like a Washington 200G TIA (transimpedance amplifier) aimed at cost‑effective, low‑power 1.6T optical connectivity for AI data centers.

All of that is in high demand, and you’re likely aware of that. But you might be underestimating that demand.

MaxLinear is fabless and does not own fabs. It designs and sells niche, high‑speed interconnect chips manufactured at a mix of mature and semi‑advanced nodes.

There’s no shortage yet in the market, but if hyperscaler spending holds, I expect a shortage here that could make margins explode higher.

Why MaxLinear can still 10x from here

MaxLinear raised its 2026 optical data center revenue target by $30-40 million to $150-170 million in just one quarter as infrastructure revenue grew 136% year-over-year in Q1. If hyperscalers continue building AI-centric data centers at the current pace, the 800G ramp alone could absorb all available merchant DSP supply.

Moreover, supply is inelastic and uncontractible. MaxLinear does not have any long-term supply agreements with Taiwan Semiconductor (NYSE:TSM | TSM Price Prediction) or UMC (NYSE:UMC). If a supply crunch hits, you’re going to see big hyperscalers compete with smaller AI companies, and you’ll also see hoarding of MaxLinear’s products.

If you believe data center buildout continues through 2028, MaxLinear’s optical DSPs are more likely than not to move from “supply constrained” into a genuine shortage, but I would expect this to be a capacity-driven shortage, unlike the commodity-driven shortage DRAM went through.

Regardless, I expect strong margins as long as the data center buildout continues.

Why MaxLinear can surge more from here

MaxLinear’s revenue is expected to be $657 million in 2026 with a 40%-plus growth. If the data center buildout continues, multibagger gains are likely, and even a 10x gain is possible.

If we see a shortage, revenue could double in 2027 to over $1.2 billion and keep growing at hypergrowth levels. The PAM4 DSP market is the bread and butter of MaxLinear’s Infrastructure segmen. It is expected to grow at a 19.7% CAGR through 2034. That’s very long-term double-digit growth. AI optical transceivers are expected to grow at nearly 60% year-over-year, and MaxLinear sells the DSP that goes inside them.

These AI optical transceivers are going to drive the near-term growth, with PAM4 DSP causing long-term growth.

I see a large margin increase if this shortage hits. The free cash flow margin in the past year is at just 0.4%. Most of MaxLinear’s competitors are much more profitable with double-digit FCF margins. Transceiver makers are not going to lose a $50,000 GPU sale over a $200 DSP shortage and will pay more for it.

Then you need to consider the expansion of the overall addressable market. MaxLinear does not need to overthrow a competitor because the market is being stretched out massively. All it needs to do is fill in the void being created by the data center buildout fast enough.

Where I see MXL stock

I see MXL stock gaining 200-350% in the next two years. The data center buildout lasting through 2028 won’t be much of a shocker since a data center slowdown has been speculated on for the past four years. Two more years of spending is not surprising.

The Infrastructure segment grew 136% year-over-year in Q1 2026 and will be the largest segment this year. This is where you need to pay attention, since if you are betting on this stock being a multibagger, you are betting here.

Is a 10x possible?

If we see a large shortage and extreme hoarding, MXL stock can 10x. Wall Street paying triple-digit earnings is quite routine now. Interest expenses of $9.75 million and stock-based comp of $74.2 million in the past year are an issue. However, it will not matter much once revenue goes over $1 billion.

I’m looking at ~$200 million in net income if the buildout accelerates through 2027. That’s even if the operating expense grows to $400 million. If there’s still a shortage and margins start thickening rapidly, MXL stock can trade at 150-200x forward earnings and deliver a 10x, but this is only in the most bullish scenario.