Marvell Technology has dropped about 34% from its all-time high, but a Motley Fool analyst argues the stock stays expensive and that rival Broadcom is the stronger AI-chip pick on client base, outlook, and valuation.
Marvell Technology shares now sit about 34% below their all-time high. The stock fell 7.21% to $194.23 at the time of writing. Even after months of volatility, the price still tops where Marvell traded at the end of May, so the sell-off gives up only a few weeks of gains.
A business built like Broadcom's
The company runs two units that investors track: networking equipment that directs information around a data center, and custom AI chips designed around each client's workloads. That model closely mirrors Broadcom, which makes the larger chipmaker a natural comparison.
The two even chase similar customers. Marvell's custom AI chip clients include Microsoft and Amazon, while Broadcom counts Alphabet, Meta Platforms, OpenAI, and Anthropic. According to the analyst, Broadcom's customers have been more aggressive in ordering custom chips, which has driven stronger revenue.
Growth forecasts trail the rival
That gap shows up in projections. Wall Street analysts expect 41% revenue growth for Marvell this fiscal year and 45% next year, lifting revenue to $16.7 billion. For Broadcom, analysts expect 66% growth this year and 63% next year, with revenue reaching $172 billion. Despite that larger, faster profile, Broadcom trades at a lower valuation.
Why the analyst prefers Broadcom
Because Broadcom carries higher expectations yet a cheaper price tag, Motley Fool's Keithen Drury argues investors should focus less on Marvell and more on Broadcom, calling it the better pick on client base, outlook, and valuation. He still rates Marvell a strong company that may perform well, though in Drury's view it trails Broadcom for now: "I think it has a long way to go before being comparable to Broadcom."
Source: The Motley Fool
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