Microsoft sure picked a bad time to unveil its latest artificial-intelligence chips -- but the launch should still be seen as a positive for Marvell stock, an AI darling that has lost some of its luster in recent days.

Shares of Marvell slid 3.3% to $259.34 ahead of Tuesday's opening bell. They were down 7.4% over the five trading sessions through Monday's close, as investors locked in profit following a rally at the start of October.

The chips and networking company has got caught up in a broader AI selloff, with investors worrying tech companies will struggle to live up to the market's sky-high expectations this earnings season.

Still, Microsoft's launch of the Maia 300 system ought to be bullish for Marvell stock, Stifel analyst Tore Svanberg wrote in a research note on Tuesday.

He rates Marvell at Buy with a $370 price target.

Maia 300 is likely the major auxiliary processing unit Marvell expects to start ramping up next year, Svanberg said. Marvell teased the program when it reported second-quarter earnings in August, with CEO Matt Murphy calling it one of the company's "largest revenue opportunities."

Marvell didn't immediately respond to questions from Barron's about whether Maia 300 is the auxiliary processing unit program Murphy described.

Microsoft unveiled its new AI chip on Monday -- the latest sign it wants to expand the use of in-house hardware so it can become less reliant on pricey chips from the likes of Nvidia and Advanced Micro Devices.

That bodes well for Marvell, which supplies custom chips and data-center infrastructure for AI giants.

"We view the Maia 300 announcement and plans for Maia to become Microsoft's default inference compute infrastructure as positive for Marvell's Custom business," Svanberg wrote.

Still, the announcement came on a rough day for the AI trade. The PHLX Semiconductor Index dropped 2.7% Monday as investors ditched chip stocks, with the weakness spreading to Asia overnight.