Marvell Technology (MRVL -5.53%) has emerged as a strong AI investment candidate throughout 2026. It has a great bull thesis and is right at the heart of the AI buildout.
Furthermore, Nvidia (NVDA -0.85%) has invested $2 billion into Marvell and announced several strategic partnerships to ensure that Nvidia's computing units function on Marvell's products. This is a big deal because Marvell is starting to grow its custom AI chip business, and this could be a major part of the company someday, especially with the two major clients that it has.
But is this enough to make Marvell the new Nvidia? Let's take a look.
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Marvell's custom AI chip business could take off over the next few years
Marvell makes connectivity devices for data centers and also assists AI hyperscalers design custom chips. This is a great business to be in right now, as the AI buildout is full steam ahead. In its custom AI chip business, Marvel has captured two major clients: Amazon and Microsoft. These two companies operated the largest and second-largest cloud computing platforms in the world, and having these two as clients is a big deal for Marvell, as it gives them a major customer that wants to reduce reliance on Nvidia chips through designing their own.
NASDAQ: MRVL
Key Data Points
This may seem like an odd relationship, because Marvell is actively pursuing an industry that undermines Nvidia's GPU business despite Nvidia investing in them. However, Nvidia isn't concerned, because it understands that GPU-based training and inference are necessary in some applications, and that custom AI chips are better for the job in others. But, because Nvidia is making sure that Marvell's chips plug into its existing network, it ensures that Nvidia chips will still be used alongside any custom chip Marvell produces. That's a great spot to be in, but can Marvell become a new Nvidia?
I don't think so. Why? It's really more like Broadcom (AVGO -2.42%).
Broadcom is a far better comparison
While Nvidia is the name in AI computing, Broadcom is following close behind. Like Marvell, Broadcom designs custom AI chips and has connectivity switches and networking equipment. This makes these two very similar and shares a lot more business overlap than they do with Nvidia. Broadcom's custom AI chip customers include Meta Platforms, Anthropic, OpenAI, and the biggest custom AI chip customer right now, Alphabet.
So, is Marvell a better buy than Broadcom or even Nvidia? Let's take a look.
For the current fiscal year, Wall Street analysts expect Marvell to deliver 41% revenue growth and 45% during the next fiscal year. While that's a solid growth rate, it's still behind Broadcom's expected 66% growth rate this year and 63% for next year. Nvidia is expected to generate 82% growth this year and 42% next year, although the analyst community has historically underprojected Nvidia's growth rate for years.
Despite those stronger growth outlook figures, Broadcom and Nvidia trade at far cheaper price tags than Marvell.
NVDA PE Ratio (Forward) data by YCharts
Why? Well, Marvell is the new shiny toy in this segment of the market. After three years of dominance, investors have gotten bored with Nvidia despite a strong outlook, and Broadcom is nearing the same level of complacency. However, individual investors don't need to get wrapped up in market sentiment like that. Instead, they should just look at the facts to decide which is the better stock pick.
While Nvidia and Marvell may not be in the same industry, Nvidia's valuation is less than half of Marvell's despite similar growth rates expected for next year. Broadcom is pretty much in the same industry as Marvell, but is valued at a much lower price tag and is expected to grow at a much faster rate. I think that combining these two makes them better buys than Marvell, and investors should be focused on these two established winners versus Marvell.
