ADI vs. MRVL: Which AI Semiconductor Stock is a Safer Bet Now?

Analog Devices ADI and Marvell Technology MRVL are two prominent players in the AI semiconductor space, offering solutions that are crucial for AI data centres and high performance computing. While Marvell Technology designs high-performance digital and infrastructure semiconductors that move, process and store data across cloud data centers, Analog Devices provides power delivery solutions to data centers.

Both Marvell Technology and Analog Devices are positioned to benefit from long-term growth in data centers and advanced technology infrastructure. From an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.

The Case for ADI Stock

Analog Devices’ data center revenues contribute to 20% of its top line and grew 50% year over year in fiscal 2025. The growth was backed by strong demand for high-performance power delivery, power control and optical connectivity solutions. The company expects this momentum to continue as it is directly linked to rising AI infrastructure investments.

On its first-quarter fiscal 2026 earnings call, ADI highlighted increasing architectural shifts toward optical connectivity, where its precision control, monitoring, and power technologies enable higher bandwidth density and lower power consumption. Communications was a strong performer, rising 63% year over year in the latest quarter, with growth led by the data center business.

ADI expects AI-driven infrastructure to remain a durable growth driver, with management stating these areas should grow at double-digit rates over the next several years. Overall, strong customer demand for power, optical and connectivity solutions positions ADI well to benefit from the ongoing AI data center build-out.

The Zacks Consensus Estimate for ADI’s 2026 revenues and earnings imply 24% and 40% year-over-year growth. The earnings estimate has been revised upward in the past seven days.

The Case for MRVL Stock

Marvell Technology’s AI connectivity portfolio includes DSPs, AEC, interconnect, ethernet switch, co-packaged optics and Active Copper Cable Linear Equalizers. To serve the growing AI market, MRVL is developing scale-up switches that connect AI accelerators within and across racks, requiring multi-terabit bandwidth and ultra-low latency.

Marvell Technology is aligning itself with industry scale-up standards like UALink and ESUN. The company expects data center switch revenues to exceed $300 million in fiscal 2026 and $500 million in fiscal 2027. Beyond its switching portfolio, MRVL has launched the Golden Cable initiative to accelerate and expand the AEC ecosystem for faster deployment of AI infrastructure by cloud and hyperscaler customers.

MRVL acquired XConn Technologies and Celestial AI to expand its connectivity portfolio. The XConn acquisition added PCIe and CXL switching solutions to MRVL’s portfolio, while the acquisition of Celestial AI will enrich MRVL’s connectivity portfolio with advanced photonic interconnect optical connectivity technology designed to improve bandwidth and latency in AI systems.

MRVL will pay 60% in upfront cash for XConn, whereas Celestial AI will involve cash expenditure of $1 billion, and this might raise investors’ concern, given MRVL has a highly leveraged balance sheet with cash and cash equivalents of $2.71 billion and long-term debt of $3.97 billion as of Nov. 1, 2025. Marvell Technology’s enterprise networking segment continues to perform strongly, helping to offset balance-sheet related apprehension.

In the third quarter of fiscal 2026, enterprise networking revenues climbed 57% year over year to $237 million, while carrier infrastructure grew 98% to $168 million. This growth trend will positively contribute to future revenues and earnings. The Zacks Consensus Estimate for MRVL’s 2026 revenues and earnings imply 42% and 81% year-over-year growth. The earnings estimate has remained unchanged in the past 30 days.

Stock Price Performance and Valuation of ADI & MRVL

In the past year, MRVL shares have plunged 16.4% against the surge of 50.9% in ADI shares.

12-Month Price Performance Chart

ADI is trading at a forward sales multiple of 12.35X, above its median of 10.15X over the past year. MRVL’s forward sales multiple sits at 6.65X, significantly lower than its median of 7.15X over the past year.

Forward 12-Month (P/S) Valuation Chart

Conclusion: ADI vs. MRVL

ADI offers steadier AI exposure through power and optical solutions, supported by rising earnings estimates and strong price momentum. Marvell Technology presents higher growth potential and a cheaper valuation but carries balance-sheet risk. Overall, ADI appears the safer near-term investment, while MRVL suits investors seeking higher-risk, higher-reward AI infrastructure upside.

Currently, ADI sports a Zacks Rank #1 (Strong Buy), while MRVL carries a Zacks Rank #4 (Sell).

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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