Key Points

Marvell Technology has surpassed Broadcom in stock market gains this year.
Broadcom has not received full credit for its impressive expansion.
Broadcom shares could accelerate due to strong earnings prospects and a more reasonable valuation.

Marvell Technology (NASDAQ: MRVL) and Broadcom (NASDAQ: AVGO) play vital roles in artificial intelligence infrastructure. Both firms create specialized AI processors along with networking gear such as switches and routers that hyperscalers and dedicated AI firms rely on to run workloads efficiently in data centers.

The two stocks have followed different paths this year. Marvell shares have nearly tripled in 2026 while Broadcom has advanced only 13 percent. Marvell's sharp climb stems from favorable views after Nvidia chief Jensen Huang suggested it might reach a one-trillion-dollar valuation.

Broadcom fell even after posting solid results because investors wanted faster expansion. This raises the question of whether Marvell is the stronger AI chip stock to purchase now or whether Broadcom's lag offers a chance to buy before growth resumes.

Let's examine the details.

Image source: Getty Images.

Broadcom leads the custom AI segment while Marvell Technology also advances

Marvell Technology and Broadcom compete in the same sector and both benefit from robust demand for custom AI chips and networking parts that support revenue and profit increases.

Together the companies hold 95 percent of the custom AI processor market with Broadcom holding the larger share. Marvell expects revenue to rise 40 percent in fiscal 2027 ending in January to 11.5 billion dollars then climb another 45 percent in fiscal 2028 to 16.5 billion dollars. The data center segment representing three quarters of sales fuels this improvement.

Marvell forecasts a 50 percent jump in data center revenue this year and another 50 percent the following year driven by faster sales of custom chips and networking gear for AI facilities.

Broadcom shows a parallel trend as the leader in custom AI chips with roughly 60 percent market share. Its AI semiconductor revenue surged 143 percent year over year in the second quarter of fiscal 2026 ending May 3. The company expects AI revenue to triple in the current quarter reaching 16 billion dollars.

Broadcom's broad customer base including Google Anthropic Meta Platforms and OpenAI supports its forecast of more than 100 billion dollars in AI revenue for fiscal 2027. It recorded 19.2 billion dollars in AI revenue during the first half of fiscal 2026 and the current quarter projection would lift nine-month totals to 35.2 billion dollars implying a quarterly run rate near 12 billion dollars.

The 100 billion dollar target for next year suggests Broadcom's quarterly AI run rate will more than double. Although Broadcom lagged Marvell in 2026 its growth trajectory and outlook remain stronger. Analysts project Broadcom earnings to rise 71 percent this fiscal year versus 42 percent for Marvell.

The pattern should hold next year with Broadcom earnings growth of 62 percent outpacing Marvell's 52 percent increase. This points to a solid chance that Broadcom regains momentum and overtakes Marvell especially given its lower valuation.

Valuation favors Broadcom as the stronger purchase

Marvell's rapid advance has left its shares notably pricier than Broadcom as the chart below illustrates.

Data by YCharts

This positions Broadcom as the preferable investment today. Its superior growth pace could prompt the market to reward it more generously ahead. Marvell's elevated valuation leaves it vulnerable to swings since investors will demand results well above forecasts in coming quarters.

Broadcom avoids that pressure after its relative underperformance making it the better AI stock to acquire now based on the factors outlined.

Should investors purchase Marvell Technology shares at present?

Before buying Marvell Technology shares review this information.

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Harsh Chauhan holds no positions in the stocks discussed. The Motley Fool maintains positions in and recommends Broadcom Marvell Technology Meta Platforms and Nvidia. The Motley Fool maintains a disclosure policy.

The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq Inc.