MRVL vs. NVDA: Which AI Infrastructure Stock is the Better Buy Now?

Marvell Technology MRVL and NVIDIA NVDA are two semiconductor stocks riding the artificial intelligence (AI) infrastructure wave. While Marvell Technology plays a key role in the custom silicon and data center connectivity space, NVIDIA makes the graphics processing units (GPUs) and AI accelerators that train large language models, power cloud servers and drive modern computing.

With the AI boom to continue driving growth for the semiconductor industry, the question remains: Which stock makes for a better investment pick today? Let’s dive into the fundamentals, valuations, growth outlook and risks for each company.

The Case for MRVL Stock

Marvell Technology’s custom AI silicon chips are experiencing massive traction among hyperscalers, which is evident in the high-growth rate of Data Center end-market revenues. The custom AI silicon chips mainly account for MRVL’s custom AI XPUs and electro-optics solutions.

Marvell Technology’s data center segment has taken the lead among all its segments with 69.2% year-over-year revenue growth in the second quarter of fiscal 2026, driven by robust demand in custom AI accelerators, including AI XPUs and custom high bandwidth memory chips.

Looking ahead, Marvell Technology plans to rapidly expand its customer base by winning more hyperscalers that want to differentiate, cut costs and seek more control over their AI infrastructure.

To match the demand, MRVL has introduced a 2.5D advanced packaging platform to cater to custom XPUs that ensure reduced power consumption. However, MRVL’s custom AI silicon, including XPUs, which are driving its revenue growth, comes with higher costs associated with manufacturing these chips.

The margin in the AI-focused custom silicon semiconductor business is fundamentally lower, affecting MRVL’s non-GAAP gross margin, which declined 250 basis points from the year-ago quarter to 59.4% in the second quarter of fiscal 2026. The Zacks Consensus Estimate for the company’s fiscal 2026 earnings indicates a year-over-year surge of 78.4%.

The Case for NVDA Stock

NVIDIA is leading the AI computing space with the latest introductions of powerful GPU platforms like Hopper 200 and Blackwell GPU. These products are gaining traction among cloud providers, enterprises and startups building AI systems.

In the second quarter of fiscal 2026, NVIDIA’s data center revenues rose 56% year over year to $41.1 billion, showing the strength of this part of its business. The company’s overall revenues and non-GAAP EPS soared 56% and 54%, respectively.

NVIDIA’s Blackwell architecture is developed to significantly boost performance, and upcoming versions like Blackwell Ultra and Vera Rubin are expected to strengthen NVIDIA’s position further as AI demand keeps growing.

In a significant development in August, NVIDIA received approval to sell its H20 chips in China after signing a deal with the U.S. government. Under the terms of the agreement, NVIDIA will pay 15% of total revenues from H20 sales in China to the U.S. government.

The latest arrangement with the U.S. government could strengthen NVIDIA’s presence in China and boost revenue contribution from the country.

Access to the Chinese market will support its overall revenue growth and maintain its position as a leader in AI chip technology. The Zacks Consensus Estimate for the company’s fiscal 2026 revenues indicates a year-over-year surge of 55.5%. The Zacks Consensus Estimate for the company’s fiscal 2026 earnings indicates a year-over-year surge of 48.8%.

Stock Price Performance and Valuation of MRVL & NVDA

Year to date, MRVL shares have plunged 20.1% against the surge of 35.4% in NVDA shares.

MRVL is trading at a forward sales multiple of 8.43X, way above its median of 7.40X over the past year. NVDA’s forward sales multiple sits at 17.58X, lower than its median of 17.66X over the past year.

Final Thoughts: NVDA is the Smarter Buy Right Now

Both NVIDIA and Marvell Technology are deeply embedded in the AI revolution, with compelling growth narratives and product roadmaps. However, NVIDIA’s dominant market position with groundbreaking technology, robust financials and an expanding market presence makes it a better investment choice.

Currently, NVDA has a Zacks Rank #2 (Buy), making the stock a must-pick compared with MRVL, which has a Zacks Rank #3 (Hold). 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).

Zacks Investment Research