MRVL vs. MCHP: Which Ethernet PHY Transceiver Stock Has an Edge?

Marvell Technology MRVL and Microchip Technology MCHP are key providers of Ethernet PHY Transceivers. Both companies serve different end markets. With different strategies used by both MRVL and MCHP, which stock has an edge in this vertical? Let’s dive into the fundamentals, valuations, growth outlook and risks for each company.

The Case for Marvell Technology Stock

Marvell Technology primarily focuses on providing ethernet PHY solutions for small and medium businesses, the automotive industry, data centers, cloud, high-performance networking and telecom. The company develops a range of legacy ethernet PHY solutions like Alaska C, AQRATE, Alaska M, Alaska X and Alaska Gigabit.

Alaska C series is Marvell Technology’s High-Speed Line-Card PHYs with models, including Alaska C 9340 P, Alaska C 93160, Alaska C 9121 P, Alaska C 7121P, Alaska C 7120 and Alaska C 5243 P used in hyperscale data center, edge, enterprise and 5G infrastructure applications.

However, Marvell Technology is selling its automotive ethernet business to Infineon in an all-cash transaction valued at $2.5 billion to focus on its core offerings that serve hyperscale and data center customers. MRVL’s automotive and industrial segment has also been suffering from declining revenues in the past five quarters. Although the automotive division has been on the path of recovery from its past decline, the industrial division is offsetting the recovery due to weakness in revenue recognition.

Other broader headwinds like lower gross margins in custom silicon are pressuring the bottom line. The ongoing macroeconomic uncertainties like the U.S. government’s evolving stance toward China, from where MRVL gained about 43% of its fiscal 2025 total revenues, are also a concern for the company.

Investors’ skepticism has also been intensified by the fear of sanctions and persistent tariff threats to China, where Marvell Technology owns research and development facilities. Weakness in MRVL’s consumer end market due to volatility in gaming demand and lumpy order patterns is a headwind.

The Case for Microchip Technology Stock

Microchip Technology develops ethernet 10/100 Mbps PHYs, GigE PHYs, Optical 1/10 Gbps PHYs, High-Density 1–800 GbE PHYs and Single-Pair Ethernet PHYs for consumer electronics, automotive, aerospace, IoT, industrial and enterprise applications. MCHP's 1–800 GbE PHYs are developed for data center, service provider, enterprise and AI/ML use cases.

MCHP’s recently launched Single-Pair Ethernet for Edge Devices solution, named 10BASE-T1S, used in automotive ethernet, factory automation, HVAC, smart lighting and power systems, is experiencing strong adoption. Alongside its ethernet solutions, MCHP’s Switchtec PCIe switches and PIC64 switches are gaining traction.

Broadly, the company’s industrial, automotive, consumer, and communications divisions are on the path of recovery, and its Aerospace & Defense business is growing at a rapid pace. MCHP’s margins are also improving on the back of Inventory reduction among its direct and downstream customers.

The company’s book to bill ratio has also improved after three years of staying beneath 1, the book to bill ratio in the March-ended quarter was a very healthy 1.07. The Zacks Consensus Estimates for Microchip Technology’s top line is pegged at $4.54 billion, which reflects year-over-year growth of 3.2%.

Stock Price Performance and Valuation of MRVL and MCHP

Year to date, Marvell Technology’s shares have plunged 35.9%, while MCHP stock has gained 29.8%.

MRVL is trading at a forward sales multiple of 6.86X, way below its median of 9.47X, over the past year. MCHP’s forward sales multiple sits at 8.35X, significantly above its median of 7.15X over the past year.

How Do Zacks Estimates Compare for MRVL & MCHP Stock?

The Zacks Consensus Estimate for Marvell Technology’s fiscal 2026 EPS implies year-over-year growth of 77.71%. Estimated revisions for MRVL’s fiscal 2026 EPS have remained highly volatile over the past 60 days.

The Zacks Consensus Estimate for MCHP’s fiscal 2026 EPS implies a year-over-year increase of 3.05%. Estimates for MCHP’s fiscal 2026 EPS have shown a consistent northward trend over the past 60 days.

Conclusion: MRVL vs. MCHP Stock

Microchip Technology has shown a strong growth in the ethernet PHY switching space with its innovative products, while Marvell Technology is suffering from macroeconomic uncertainties, shrinking margins and weakness in its automotive and industrial segments. Considering these factors, we suggest MCHP to be a better pick at present.

MCHP carries a Zacks Rank #2 (Buy), while MRVL carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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