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CRDO vs. MRVL: Which AI Connectivity Stock Has More Upside?
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Key Takeaways
CRDO's fiscal Q4 revenues surged 179.7% YoY, with fiscal 2025 revenues rising 126% to $436.8 million.
CRDO sees strength in AECs, retimers, and DSPs as AI workloads drive high-speed connectivity demand.
MRVL's data center revenues rose 76% YoY, fueled by demand for custom AI silicon and electro-optics products.
Credo Technology Group Holding Ltd. (CRDO - Free Report) and Marvell Technology, Inc. (MRVL - Free Report) are semiconductor companies that specialize in high-speed connectivity solutions essential for AI-driven data centers.
Amid rapid artificial intelligence (AI) proliferation, investors are increasingly 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, which makes it an intriguing comparison for investors.
So, now the question arises: Which stock makes a better investment pick at present? Let’s take a deep dive into the pros and cons of each company.
CRDO: Small-Cap Hypergrowth
Credo is gaining a strong market presence in both Ethernet and Active Electrical Cables (AECs) solutions specialized for data centers. AEC's product line posted double-digit sequential growth in the fiscal fourth quarter. The demand for AECs is increasing as ZeroFlap AECs offer more than 100 times improved reliability than laser-based optical solutions. Fiscal 2025 revenues rose 126% year over year to $436.8 million, while fourth-quarter revenues surged 179.7% year over year to $170 million.
Moreover, Credo's system-level approach is giving it a competitive edge. 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. With demonstration of PCIe Gen6 AECs and increasing hyperscaler interest, this product line is expected to remain a growth engine going ahead.
Momentum in the optical business, particularly for Optical Digital Signal Processors (DSPs), bodes well. CRDO achieved revenue targets for this business in fiscal 2025 and expects expansion of customer diversity across lane rates, port speeds and applications to accelerate revenue growth going ahead. The company expects its 3-nanometer 200-gig-per-lane optical DSP (port speeds up to 1.6 terabits per second) to boost the industry’s transition to 200 gig lane speeds.
CRDO’s PCIe retimers and Ethernet retimers continue to witness customer interest, especially for scale-out networks in AI servers. The growing demand underscores the increasing importance of high-performance solutions in the rapidly expanding AI-server market. Shift to 100 gig per lane solutions and higher demand for system-level expertise and software capabilities for dealing with AI-optimized architectures bode well for CRDO’s retimer business.
For the first quarter of fiscal 2026, the company expects revenues between $185 million and $195 million, up 12% at the midpoint. For fiscal 2026, Credo anticipates revenues to surpass $800 million, implying more than 85% year-over-year growth. That said, increasing market competition and macroeconomic uncertainties may impact CRDO’s growth trajectory.
MRVL: Mid-Cap AI Infrastructure Leader
Marvell is a semiconductor company with a diversified product portfolio that includes custom ASICs, data center switches, and 5G chips.
Solid demand for its storage and networking chips from the 5G infrastructure and data-center end markets is driving the performance of the data center end market segment for Marvell. Hyperscalers are increasing their reliance on custom silicon for AI workloads, which bodes well for MRVL. In the first quarter, Data center revenues of $1.44 billion increased 76% year over year and 5% sequentially. The solid momentum in electro-optics products, custom AI silicon and next-gen switch divisions primarily drove the robust year-over-year and sequential increase. The segment accounted for 76% of the quarter’s total revenues, representing MRVL’s largest end market.
The company expects this growth to continue into the fiscal second quarter with mid-single-digit sequential growth and strong year-over-year growth. AI now represents the majority of the data center business, and that proportion is expected to rise further. Marvell also teamed up with NVIDIA and is now integrating NVLink Fusion into its custom silicon platform. This integration will facilitate Marvell customers to accelerate the development of custom scale-up solutions, thereby offering greater flexibility and high-performance in developing next-generation AI infrastructure.
The transition from copper to optical connectivity in AI infrastructure represents a tremendous growth opportunity for its Co-Packaged Optics technology. Marvell’s 400G-per-lane PAM optical interconnect solutions are expected to help it gain further market share. MRVL’s enterprise networking and carrier infrastructure segments are benefiting from demand recovery.
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. Also, its custom AI silicon, including XPUs is weighing on the gross margin performance due to higher costs related to the manufacturing of these chips.
Price Performance and Valuation for CRDO & MRVL
Over the past month, CRDO and MRVL have registered gains of 38.2% and 20.2%, respectively.
Image Source: Zacks Investment Research
In terms of the forward 12-month price/sales ratio, CRDO is trading at 17.40X, higher than MRVL’s 7.36X.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for CRDO & MRVL?
Analysts have significantly revised estimates for CRDO’s bottom line in the past 60 days.
Image Source: Zacks Investment Research
Meanwhile, for MRVL, there is a marginal upward estimate revision.
Image Source: Zacks Investment Research
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. CRDO flaunts a Zacks Rank #1 (Strong Buy) at present, while Marvell carries a Zacks Rank #3 (Hold). Consequently, in terms of Zacks Rank, CRDO seems to be a better pick at the moment.
Image: Bigstock
CRDO vs. MRVL: Which AI Connectivity Stock Has More Upside?
Key Takeaways
Credo Technology Group Holding Ltd. (CRDO - Free Report) and Marvell Technology, Inc. (MRVL - Free Report) are semiconductor companies that specialize in high-speed connectivity solutions essential for AI-driven data centers.
Amid rapid artificial intelligence (AI) proliferation, investors are increasingly 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, which makes it an intriguing comparison for investors.
So, now the question arises: Which stock makes a better investment pick at present? Let’s take a deep dive into the pros and cons of each company.
CRDO: Small-Cap Hypergrowth
Credo is gaining a strong market presence in both Ethernet and Active Electrical Cables (AECs) solutions specialized for data centers. AEC's product line posted double-digit sequential growth in the fiscal fourth quarter. The demand for AECs is increasing as ZeroFlap AECs offer more than 100 times improved reliability than laser-based optical solutions. Fiscal 2025 revenues rose 126% year over year to $436.8 million, while fourth-quarter revenues surged 179.7% year over year to $170 million.
Moreover, Credo's system-level approach is giving it a competitive edge. 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. With demonstration of PCIe Gen6 AECs and increasing hyperscaler interest, this product line is expected to remain a growth engine going ahead.
Momentum in the optical business, particularly for Optical Digital Signal Processors (DSPs), bodes well. CRDO achieved revenue targets for this business in fiscal 2025 and expects expansion of customer diversity across lane rates, port speeds and applications to accelerate revenue growth going ahead. The company expects its 3-nanometer 200-gig-per-lane optical DSP (port speeds up to 1.6 terabits per second) to boost the industry’s transition to 200 gig lane speeds.
CRDO’s PCIe retimers and Ethernet retimers continue to witness customer interest, especially for scale-out networks in AI servers. The growing demand underscores the increasing importance of high-performance solutions in the rapidly expanding AI-server market. Shift to 100 gig per lane solutions and higher demand for system-level expertise and software capabilities for dealing with AI-optimized architectures bode well for CRDO’s retimer business.
For the first quarter of fiscal 2026, the company expects revenues between $185 million and $195 million, up 12% at the midpoint. For fiscal 2026, Credo anticipates revenues to surpass $800 million, implying more than 85% year-over-year growth. That said, increasing market competition and macroeconomic uncertainties may impact CRDO’s growth trajectory.
MRVL: Mid-Cap AI Infrastructure Leader
Marvell is a semiconductor company with a diversified product portfolio that includes custom ASICs, data center switches, and 5G chips.
Solid demand for its storage and networking chips from the 5G infrastructure and data-center end markets is driving the performance of the data center end market segment for Marvell. Hyperscalers are increasing their reliance on custom silicon for AI workloads, which bodes well for MRVL. In the first quarter, Data center revenues of $1.44 billion increased 76% year over year and 5% sequentially. The solid momentum in electro-optics products, custom AI silicon and next-gen switch divisions primarily drove the robust year-over-year and sequential increase. The segment accounted for 76% of the quarter’s total revenues, representing MRVL’s largest end market.
The company expects this growth to continue into the fiscal second quarter with mid-single-digit sequential growth and strong year-over-year growth. AI now represents the majority of the data center business, and that proportion is expected to rise further. Marvell also teamed up with NVIDIA and is now integrating NVLink Fusion into its custom silicon platform. This integration will facilitate Marvell customers to accelerate the development of custom scale-up solutions, thereby offering greater flexibility and high-performance in developing next-generation AI infrastructure.
The transition from copper to optical connectivity in AI infrastructure represents a tremendous growth opportunity for its Co-Packaged Optics technology. Marvell’s 400G-per-lane PAM optical interconnect solutions are expected to help it gain further market share. MRVL’s enterprise networking and carrier infrastructure segments are benefiting from demand recovery.
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. Also, its custom AI silicon, including XPUs is weighing on the gross margin performance due to higher costs related to the manufacturing of these chips.
Price Performance and Valuation for CRDO & MRVL
Over the past month, CRDO and MRVL have registered gains of 38.2% and 20.2%, respectively.
Image Source: Zacks Investment Research
In terms of the forward 12-month price/sales ratio, CRDO is trading at 17.40X, higher than MRVL’s 7.36X.
Image Source: Zacks Investment Research
How Do Zacks Estimates Compare for CRDO & MRVL?
Analysts have significantly revised estimates for CRDO’s bottom line in the past 60 days.
Image Source: Zacks Investment Research
Meanwhile, for MRVL, there is a marginal upward estimate revision.
Image Source: Zacks Investment Research
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. CRDO flaunts a Zacks Rank #1 (Strong Buy) at present, while Marvell carries a Zacks Rank #3 (Hold). 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.