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Marvell vs. NVIDIA: One AI Stock Looks Like the Better Buy Now
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Key Takeaways
Marvell's Q2 revenues hit $2.739B, up 37%, while Data Center revenues grew 46% year over year.
NVIDIA's Data Center revenues jumped 117% to $89B, driving 106% growth in total revenues.
NVIDIA's 74% projected gross margin and 96% ROE exceed Marvell's 57.5%-58.5% and 17.9%.
Both Marvell Technology, Inc. (MRVL - Free Report) and its larger counterpart, NVIDIA Corporation (NVDA - Free Report) , are benefiting from the rising Data Center demand amid the ongoing artificial intelligence (AI) infrastructure boom. While both companies delivered strong quarterly results, differences in profitability, AI exposure, and outlook warrant a closer look when determining which stock to buy now.
Marvell’s AI Momentum Powers Record Growth
Given Marvell’s scale, the company posted substantial revenue growth in its latest quarterly results. Revenues for the fiscal second quarter of 2027 reached a record $2.739 billion, up 37% year over year, according to the company’s Aug. 27 press release. With Marvell supplying vital infrastructure for data center systems, its Data Center revenues grew even faster, up 46% year over year.
For the fiscal third quarter of 2027, management expects revenues to reach $3.15 billion, plus or minus 5%. At the midpoint, it represents roughly 15% sequential growth. Management also remained optimistic about revenue growth throughout fiscal year 2027 and 2028. This suggests that Marvell’s strong performance goes beyond the latest quarter, with management increasing its forward expectations.
Marvell’s Chairman and chief executive officer, Matt Murphy, said the company is seeing exceptionally strong AI-related bookings, with growth expected to accelerate further across their Data Center portfolio, supported by robust demand in Connectivity and accelerating Custom business.
NVIDIA’s AI Boom Fuels Record Growth and Strong Profitability
NVIDIA’s revenue growth has been phenomenal, reaching $96.2 billion in the fiscal second quarter of 2027, up 106% year over year and 18% sequentially, according to the company’s Aug. 26 press release. Data Center remained the primary growth engine, with its revenues jumping 117% year over year to $89 billion, indicating continued strength in AI infrastructure demand.
NVIDIA’s gross margin reached 75%, up from 72.4% a year ago, while both GAAP and non-GAAP net income increased, demonstrating the company’s strong profitability. GAAP operating income more than doubled year over year, underscoring significant operating leverage.
NVIDIA expects revenues of $108 billion, plus or minus 2%, for the fiscal third quarter of 2027, indicating continued sequential growth. Profitability is also expected to remain strong, while the company’s Vera Rubin platform is now in full production, positioning NVIDIA to capitalize on continued AI infrastructure demand.
Why NVIDIA Could Be the Better Buy Over Marvell
Banking on AI and Data Center demand, both Marvell and NVIDIA delivered strong quarterly results. Still, their exposure to the AI opportunity varies significantly.
Marvell’s growth is increasingly driven by strong data center demand. However, if capital spending by AI infrastructure companies slows down in the future, Marvell’s growth could decelerate. In contrast, NVIDIA’s exposure across the broader AI computing platform, along with significantly faster Data Center growth, provides greater diversification within the AI market and reduces the company’s exposure to concentration risk.
Marvell also appears to be emphasizing revenue expansion, but its forecasted fiscal third-quarter 2027 non-GAAP gross margin of 57.5-58.5% is below the reported 58.9% in the fiscal second quarter. This suggests that the expected revenue increase may not translate into proportional earnings, a concern for investors to monitor. In comparison, NVIDIA expects a non-GAAP gross margin of 74% in the fiscal third quarter of 2027, highlighting its much stronger margin profile.
Moreover, NVIDIA appears more efficient than Marvell at generating profits from shareholders’ equity. This is because NVIDIA’s return on equity (ROE) of 96% exceeds Marvell’s ROE of 17.9%.
Image Source: Zacks Investment Research
Therefore, NVIDIA’s stronger growth, profitability, and ROE make it a more compelling investment option now than Marvell. Additionally, NVIDIA appears more attractively valued than Marvell. Per the price/earnings ratio, NVDA trades at 24.39 forward earnings compared with MRVL’s forward earnings multiple of 62.25.
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Marvell vs. NVIDIA: One AI Stock Looks Like the Better Buy Now
Key Takeaways
Both Marvell Technology, Inc. (MRVL - Free Report) and its larger counterpart, NVIDIA Corporation (NVDA - Free Report) , are benefiting from the rising Data Center demand amid the ongoing artificial intelligence (AI) infrastructure boom. While both companies delivered strong quarterly results, differences in profitability, AI exposure, and outlook warrant a closer look when determining which stock to buy now.
Marvell’s AI Momentum Powers Record Growth
Given Marvell’s scale, the company posted substantial revenue growth in its latest quarterly results. Revenues for the fiscal second quarter of 2027 reached a record $2.739 billion, up 37% year over year, according to the company’s Aug. 27 press release. With Marvell supplying vital infrastructure for data center systems, its Data Center revenues grew even faster, up 46% year over year.
For the fiscal third quarter of 2027, management expects revenues to reach $3.15 billion, plus or minus 5%. At the midpoint, it represents roughly 15% sequential growth. Management also remained optimistic about revenue growth throughout fiscal year 2027 and 2028. This suggests that Marvell’s strong performance goes beyond the latest quarter, with management increasing its forward expectations.
Marvell’s Chairman and chief executive officer, Matt Murphy, said the company is seeing exceptionally strong AI-related bookings, with growth expected to accelerate further across their Data Center portfolio, supported by robust demand in Connectivity and accelerating Custom business.
NVIDIA’s AI Boom Fuels Record Growth and Strong Profitability
NVIDIA’s revenue growth has been phenomenal, reaching $96.2 billion in the fiscal second quarter of 2027, up 106% year over year and 18% sequentially, according to the company’s Aug. 26 press release. Data Center remained the primary growth engine, with its revenues jumping 117% year over year to $89 billion, indicating continued strength in AI infrastructure demand.
NVIDIA’s gross margin reached 75%, up from 72.4% a year ago, while both GAAP and non-GAAP net income increased, demonstrating the company’s strong profitability. GAAP operating income more than doubled year over year, underscoring significant operating leverage.
NVIDIA expects revenues of $108 billion, plus or minus 2%, for the fiscal third quarter of 2027, indicating continued sequential growth. Profitability is also expected to remain strong, while the company’s Vera Rubin platform is now in full production, positioning NVIDIA to capitalize on continued AI infrastructure demand.
Why NVIDIA Could Be the Better Buy Over Marvell
Banking on AI and Data Center demand, both Marvell and NVIDIA delivered strong quarterly results. Still, their exposure to the AI opportunity varies significantly.
Marvell’s growth is increasingly driven by strong data center demand. However, if capital spending by AI infrastructure companies slows down in the future, Marvell’s growth could decelerate. In contrast, NVIDIA’s exposure across the broader AI computing platform, along with significantly faster Data Center growth, provides greater diversification within the AI market and reduces the company’s exposure to concentration risk.
Marvell also appears to be emphasizing revenue expansion, but its forecasted fiscal third-quarter 2027 non-GAAP gross margin of 57.5-58.5% is below the reported 58.9% in the fiscal second quarter. This suggests that the expected revenue increase may not translate into proportional earnings, a concern for investors to monitor. In comparison, NVIDIA expects a non-GAAP gross margin of 74% in the fiscal third quarter of 2027, highlighting its much stronger margin profile.
Moreover, NVIDIA appears more efficient than Marvell at generating profits from shareholders’ equity. This is because NVIDIA’s return on equity (ROE) of 96% exceeds Marvell’s ROE of 17.9%.
Image Source: Zacks Investment Research
Therefore, NVIDIA’s stronger growth, profitability, and ROE make it a more compelling investment option now than Marvell. Additionally, NVIDIA appears more attractively valued than Marvell. Per the price/earnings ratio, NVDA trades at 24.39 forward earnings compared with MRVL’s forward earnings multiple of 62.25.
Image Source: Zacks Investment Research
NVIDIA currently has a Zacks Rank #1 (Strong Buy), while Marvell has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.