Marvell Technology (MRVL 4.77%) and Broadcom (AVGO 4.86%) are key players in the artificial intelligence (AI) infrastructure space. They design custom AI processors and networking components, such as switches and routers, which are in terrific demand from hyperscalers and pure-play AI companies, as they help them run AI workloads seamlessly and cost-effectively in data centers.
However, both stocks have witnessed contrasting fortunes on the stock market this year. While shares of Marvell have nearly tripled so far in 2026, Broadcom stock has risen just 13%. Marvell's parabolic rise has been fueled by positive sentiment around the stock following praise from Nvidia CEO Jensen Huang, who believes that it could become a $1 trillion company.
Broadcom, meanwhile, plunged despite delivering solid results recently, as investors were expecting stronger growth from the company. Does this mean Marvell is the better AI semiconductor stock to buy right now? Or should investors consider using Broadcom's underperformance as a buying opportunity and load up on its shares before it steps on the gas?
Let's find out.
Image source: Getty Images.
Marvell Technology and Broadcom operate in the same industry. Not surprisingly, both companies have been experiencing solid demand for their custom AI chips and networking components, driving healthy revenue and earnings growth.
Broadcom and Marvell together control 95% of the custom AI processor space, with Broadcom being the much larger player. Marvell is anticipating a 40% increase in revenue in fiscal 2027 (which will end in January next year) to $11.5 billion, followed by a stronger jump of 45% in fiscal 2028 to $16.5 billion. The data center business, which accounts for three-fourths of Marvell's top line, is the primary driver behind its improving growth profile.
Marvell is projecting a 50% increase in data center revenue this year, followed by a 50% jump in the next one. The growth will be driven by a significant acceleration in sales of both custom chips and networking components used in AI data centers.
A similar story is unfolding at Broadcom, the leader in custom AI chips with an estimated market share of 60%. Its AI semiconductor revenue shot up by 143% year over year in the second quarter of fiscal 2026 (which ended on May 3). What's more, Broadcom anticipates its AI revenue to jump by 3x in the current quarter to $16 billion.
Broadcom's sizable influence and diversified AI customer base, which includes companies such as Google, Anthropic, Meta Platforms, and OpenAI, is why it anticipates its AI revenue exceeding $100 billion in fiscal 2027. For some perspective, Broadcom has generated $19.2 billion in AI revenue in the first half of fiscal 2026. Its $16 billion forecast for the current quarter would bring its nine-month AI revenue to $35.2 billion in the current fiscal year, translating into a quarterly revenue run rate of almost $12 billion.
The $100 billion forecast for the next fiscal year indicates that Broadcom's quarterly AI revenue run rate is poised to more than double. So, while Broadcom has underperformed Marvell in 2026, its growth rate and outlook are far superior. For instance, analysts are expecting Broadcom's earnings to jump by 71% in the current fiscal year, while Marvell is expected to deliver a 42% increase.
The trend is anticipated to continue next year as well, with Broadcom's projected earnings growth of 62% set to outpace the 52% jump in Marvell's bottom line. So, there is a strong possibility that Broadcom will regain its momentum and outpace Marvell going forward, especially given its more attractive valuation.
Marvell's red-hot rally has made the stock significantly more expensive than Broadcom's, as shown in the following chart.
Data by YCharts
This makes Broadcom a better investment compared to Marvell right now. The faster growth that Broadcom can offer compared to Marvell could eventually lead the market to reward it more handsomely going forward. On the other hand, Marvell's expensive valuation exposes the stock to potential volatility, as investors will now expect the company to smash estimates and perform well above expectations in future quarters.
Broadcom doesn't carry that weight given its underperformance so far this year, making it the better AI stock to buy right now, considering the points discussed above.
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom, Marvell Technology, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
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