CRDO vs. MRVL: Which Connectivity Stock Has More Upside in the AI Era?

Credo Technology Group Holding Ltd. CRDO and Marvell Technology, Inc. MRVL are semiconductor companies that specialize in high-speed connectivity solutions essential for AI-driven data centers.

Amid rapid artificial intelligence (AI) proliferation, investors are focusing on companies that offer the infrastructure behind it. The semiconductor companies are at the core of AI workloads as these offer solutions to enable augmented processing power and efficiency. Both CRDO and Marvell are key players in this domain and bring to the table unique strengths. This makes it an intriguing comparison for investors.

So, now the question arises: Which stock makes a better investment pick at present? Let’s dive into the fundamentals, valuations, growth outlook and risks for each company.

CRDO: An Emerging Growth Story

CRDO’s growth is fueled by the strength of its AEC business. In the last reported quarter, the AEC product line increased by healthy double digits sequentially. The demand for AECs is increasing as these offer up to 1,000 times more reliability with 50% lower power consumption than optical solutions, added CRDO. The adoption of rack-to-rack deployments is expected to boost further revenues from this product line. Moreover, the system-level approach provides it with a strong competitive moat. It owns the entire stack of SerDes IP, Retimer ICs, system-level design, qualification and production. This integrated approach allows faster innovation cycles and strong cost efficiency.

Credo’s recent quarterly performance has validated its positioning as one of the most critical enablers of hyperscaler AI infrastructure buildouts. In the fiscal first quarter, three hyperscalers each contributed over 10% of revenues, and there was a material revenue contribution from a fourth hyperscaler. It expects revenues from the additional hyperscaler to increase throughout fiscal 2026. Management expects these three to four hyperscalers to exceed 10% of revenues in the upcoming quarters and fiscal year. Two additional hyperscalers are also expected to commence ramping in fiscal 2026. Customer diversification reduces concentration risk.

Strength in the optical business is another key catalyst. The portfolio consists of both DSP and linear receive optical or LRO solutions that support port speeds up to 1.6 terabits per second, aligning with hyperscaler plans for next-generation network architectures. It is investing heavily in both copper and optical solutions to diversify its market position. Its optical DSP segment maintained strong momentum, positioning the company to achieve a doubling of optical revenues again in the current fiscal year.  

Another driver is Credo’s PCIe and Ethernet retimer businesses. CRDO added that recently launched PCIe retimer solutions were gaining “significant traction” and expects PCIe design wins in 2025 with production revenue in 2026. It is looking to capture the opportunity presented by the industry’s shift to 200-gig per lane scale-up solutions.

Credo ended fiscal first quarter 2026 with a fortified balance sheet boasting a cash position of $479.6 million. For a company riding the AI infrastructure wave, this liquidity is a potential accelerator to seize revenue opportunities. For fiscal 2026, the company anticipates mid-single-digit sequential revenue growth, resulting in roughly 120% year-over-year growth. The company expects non-GAAP operating expenses to rise by less than 50% year over year in fiscal 2026. Non-GAAP net margin is projected to be around 40% both in the upcoming quarters and for the fiscal year 2026.

MRVL: An Established Mid-Cap Player

Marvell is a semiconductor company with a diversified product portfolio that includes custom ASICs, data center switches and 5G chips. The company’s strategic pivot to prioritize the data center market is proving to be a successful growth catalyst. The data center end market emerged as the company's largest segment, with revenue contribution of 74% in the fiscal second quarter of 2026. The company's custom XPU and XPU-attached products, as well as its electro-optics interconnect portfolio, are the primary drivers of its strong data center performance. 

On the last earnings call, MRVL highlighted that it secured more than 18 XPU and XPU-attach socket wins. Its design pipeline has expanded to more than 50 opportunities worth $75 billion, underscoring hyperscalers’ growing reliance on Marvell’s differentiated capabilities.  Revenues of  $1.49 billion for this segment jumped 69% year over year and 3% sequentially, driven by traction in custom XPU and XPU attached products and electro-optics interconnect products. It expects electro-optics products to grow in double digits sequentially on a percentage basis in the current quarter. Despite strong demand for electro-optics, management expects flat data center revenues due to lower custom silicon revenues. Custom silicon revenues are expected to rebound in the fourth quarter.  

AI and cloud comprised more than 90% of data center revenue, with management expecting a significantly expanding total addressable market (TAM) in the data center space going forward. Management targets expanding data center share from 13% in 2024 to 20% of a $94 billion TAM by 2028. 

MRVL expects strong optics adoption going ahead, which is expected to drive demand for its interconnect products and technologies, including DSPs for AECs and active optical cables or AOCs, along with retimers for PCI, Ethernet and UALink and silicon photonics for near-packaged and co-packaged XPU optics. Strong demand for its 800-gig PAM DSPs bodes well, and it has also started volume shipments of its next-generation 200-gig per lane 1.6T PAM DSPs. Within the Marvell is pushing boundaries with 400G per lane PAM technology, enabling 3.2T optical interconnects.

Marvell’s enterprise networking and carrier infrastructure segments are rebounding strongly. In the second quarter of fiscal 2026, enterprise networking revenues rose 28% year over year to $194 million, while carrier infrastructure surged 71% to $130 million. It also completed the $2.5 billion all-cash divestiture of its Automotive Ethernet business, monetizing a non-core asset, and plans to use proceeds for repurchase and technology investments. 

Nonetheless, trade tensions between the United States and China are a matter of concern for Marvell Technology, as the company generates considerable revenues from the Chinese market. Reliance on hyperscalers, heavy leverage and stiff competition are additional headwinds.  

Price Performance and Valuation for CRDO & MRVL

Over the past three months, CRDO has registered gains of 76% while MRVL has declined 1.7%.

In terms of the forward 12-month price/sales ratio, CRDO is trading at 26.94X, lower than MRVL’s 7.17X.

How Do Zacks Estimates Compare for CRDO & MRVL?

CRDO

Analysts have significantly revised their earnings estimates for CRDO, but for MRVL, there has been only a minor upward revision in the past 60 days.

MRVL

CRDO or MRVL: Which is a Better Pick?

Both CRDO and MRVL are well-positioned to gain from the rapidly growing AI-driven data center market. 

MRVL at present carries a Zacks Rank #3 (Hold), while CRDO flaunts a Zacks Rank #1 (Strong Buy). Consequently, in terms of Zacks Rank, CRDO seems to be a better pick at the moment.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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