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

Credo Technology Group (CRDO) and Marvell Technology (MRVL) are both positioned to benefit from the growth in AI-driven data centers, with CRDO's fiscal Q4 revenues surging 179.7% YoY and MRVL's data center revenues rising 76% YoY. CRDO is experiencing strong demand for its AECs and expects fiscal 2026 revenues to surpass $800 million, while MRVL benefits from custom AI silicon and electro-optics demand, projecting continued growth in its data center segment. CRDO currently holds a Zacks Rank #1 (Strong Buy) compared to MRVL's Zacks Rank #3 (Hold), though MRVL faces concerns regarding trade tensions and gross margin performance.

Analysis

Credo Technology Group (CRDO) and Marvell Technology (MRVL) are both capitalizing on the escalating demand for AI infrastructure, yet they present distinct investment profiles. CRDO reported a substantial 179.7% year-over-year surge in fiscal Q4 revenues to $170 million and projects fiscal 2026 revenues to exceed $800 million, implying over 85% year-over-year growth, driven by its Active Electrical Cables (AECs), retimers, and Optical Digital Signal Processors (DSPs); its AEC product line, noted for offering over 100 times improved reliability than laser-based optical solutions, saw double-digit sequential growth in the fiscal fourth quarter. CRDO's integrated system-level approach, encompassing the entire stack from SerDes IP to production, is cited as a key competitive advantage enabling faster innovation cycles and strong cost efficiency, with its 3-nanometer 200-gig-per-lane optical DSP expected to boost industry transition. Marvell, a larger entity, posted a 76% year-over-year increase in its Q1 data center revenues to $1.44 billion, which now constitutes 76% of its total revenue, fueled by custom AI silicon and electro-optics. Marvell anticipates continued mid-single-digit sequential growth in this segment and is strengthening its position through collaborations, such as integrating NVIDIA's NVLink Fusion into its custom silicon platform. However, Marvell faces headwinds from US-China trade tensions, given its considerable revenues from the Chinese market, and gross margin pressure due to higher manufacturing costs for custom AI silicon. While CRDO trades at a higher forward 12-month price/sales ratio of 17.40X compared to MRVL's 7.36X, it has demonstrated stronger recent stock performance with a 38.2% gain over the past month versus MRVL's 20.2%, and has seen significant upward revisions in analyst estimates, reflected in its Zacks Rank #1 (Strong Buy) versus MRVL's #3 (Hold).

Key Decisions for Investors

• Investors seeking aggressive growth in the AI connectivity space might find Credo Technology (CRDO) compelling, given its triple-digit revenue growth, strong fiscal 2026 guidance of over $800 million, and positive analyst sentiment, while acknowledging its significantly higher price/sales valuation of 17.40X and the risks associated with a smaller, rapidly scaling company.
• Marvell Technology (MRVL) offers a more diversified exposure to AI infrastructure with robust data center revenue growth of 76% year-over-year and strategic initiatives like NVIDIA collaboration, but investors should carefully monitor its gross margin performance, impacted by custom AI silicon costs, and ongoing US-China trade tensions affecting its revenue streams.
• Considering CRDO's Zacks Rank #1 (Strong Buy) and significant upward earnings estimate revisions against MRVL's Zacks Rank #3 (Hold) and marginal estimate revisions, CRDO could be favored by investors with a higher risk appetite for growth, though its premium valuation necessitates careful consideration of sustained execution relative to its strong market performance.