Better Buy After the Semiconductor Sell-Off: Marvell or Broadcom?
Written by Daniel Sparks for The Motley Fool -> Broadcom's revenue growth recently accelerated, and AI semiconductor revenue now accounts for nearly half of its total sales. Marvell's surge over the past week followed a high-profile endorsement from Nvidia's CEO. One of these
Broadcom's revenue growth recently accelerated, and AI semiconductor revenue now accounts for nearly half of its total sales.
Marvell's surge over the past week followed a high-profile endorsement from Nvidia's CEO.
One of these stocks trades at a far cheaper valuation than the other.
The companies that design custom chips for the world's largest cloud operators have been among the biggest winners of the artificial intelligence (AI) build-out. But last week, investors were handed a sharp reminder that expectations can outrun even rapid growth. Marvell Technology (NASDAQ: MRVL) , which had soared roughly 32% in a single session days earlier, gave back a good chunk of that gain by Friday's close. And Broadcom (NASDAQ: AVGO) tumbled about 12% on Thursday and slid further on Friday after its latest outlook for AI chip sales came in below the loftiest hopes.
Both companies design custom AI accelerators and the high-speed networking gear that links sprawling data centers, selling largely to a handful of hyperscale customers. So, with both stocks now well off their recent highs, which one looks like the better buy?
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Marvell plays in the same arena as Broadcom -- custom silicon and connectivity chips for cloud customers -- but from a far smaller base. In its fiscal first quarter of 2027 (the period ended May 2, 2026), revenue grew 28% to a record $2.4 billion, with its data center business making up more than three-quarters of the total. Management guided for 35% growth in the current quarter, citing accelerating demand.
"We are seeing exceptional AI-related bookings, and as a result, we are significantly raising Marvell's revenue outlook for both fiscal 2027 and fiscal 2028 compared with the guidance we provided last quarter," said CEO Matt Murphy in the company's fiscal first-quarter earnings release.
