Should Investors Buy Broadcom Stock Instead of Marvell Stock? | AVGO Stock | MRVL Stock

Parkev Tatevosian, CFA•Jun 29, 2026

Summary

Parkev compares Marvell Technologies and Broadcom to determine which is the better investment, focusing on revenue, profitability, and valuation, especially given the booming demand for AI-related semiconductor products.

From a market outlook perspective, Parkev notes that the semiconductor industry, while traditionally cyclical, may become less so in the future. This potential shift is attributed to the increasing prevalence of longer-term contracts, some spanning up to 5 years (as observed with Micron), which could help smooth out industry patterns. This trend is unprecedented in the semiconductor industry, although its full impact on cyclicality remains to be seen.

Parkev presents several arguments for his conclusion:

**Revenue Comparison:** Broadcom demonstrates significantly greater scale, with a forecasted revenue of $64 billion in 2025 compared to Marvell's $8.2 billion. While Marvell is projected to have better *revenue growth rates*, Broadcom is expected to achieve higher *overall revenue growth*, increasing from $64 billion to $228 billion by 2028, whereas Marvell is forecast to grow from $8.2 billion to $22.9 billion by fiscal year 2029. Both companies develop proprietary technology that offers alternatives to or complements Nvidia's GPUs and networking equipment. Broadcom has major customers like Alphabet, which utilizes its TPU tensor processing units and networking equipment in data centers.

**Profitability (Cash Flow from Operations to Sales Ratio):** Broadcom consistently outperforms Marvell in this metric, boasting a 44.5% ratio compared to Marvell's 23.6%. Broadcom's management anticipates further margin improvement, expecting to return to levels above 50% once the VMware acquisition is fully integrated. Marvell has shown significant improvement, rising from a negative 20% rate in 2017.

**Profitability (Return on Invested Capital - ROIC):** Broadcom again shows superior performance with an ROIC of 20.3% compared to Marvell's 12.79%. Broadcom has maintained a better and more stable ROIC over the past decade, while Marvell has experienced several years of negative and volatile returns.

**Valuation (Forward Price to Earnings):** Marvell appears significantly more expensive, trading at a forward P/E of 66, which is near its highest levels since early 2024. In contrast, Broadcom trades at a forward P/E of 31.5, near its lower end since early 2024. The high valuation premium for Marvell is partly attributed to investor enthusiasm, intensified by Nvidia CEO Jensen Huang's suggestion that Marvell could become a $1 trillion company, implying a five-fold growth from its current market capitalization of $233 billion.

**Valuation (Discounted Cash Flow - DCF Model):** Parkev's DCF analysis indicates that Broadcom stock's fair value is approximately $500 per share, making its current market price of $367 significantly undervalued. For Marvell, his DCF fair value calculation is $174, well below its current market price of $267, suggesting it is overvalued.

In conclusion, based on its superior profitability metrics and more attractive valuation (being undervalued by DCF and having a lower forward P/E), Parkev clearly favors Broadcom over Marvell.

Mentioned Stocks

AVGO

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev considers Broadcom undervalued based on his discounted cash flow (DCF) model, calculating a fair value of around $500 per share compared to its current market price of $367. It also trades at a more attractive forward P/E of 31.5, which is near its lower end since early 2024, unlike Marvell. Broadcom demonstrates superior profitability, with a cash flow from operations to sales ratio of 44.5% (vs. Marvell's 23.6%) and a return on invested capital of 20.3% (vs. Marvell's 12.79%). Its management expects margins to improve further post-VMware acquisition. Broadcom also has significantly higher revenue and stronger overall revenue growth forecasts. Parkev explicitly states he would choose Broadcom over Marvell and owns Broadcom stock in his portfolio, and is interested in buying more at current valuations.

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MRVL

Sentiment: SELL

Reasoning: Parkev views Marvell as overvalued based on both its forward P/E (66, near its highest since early 2024) and his discounted cash flow (DCF) model, which calculated a fair value of $174 compared to its current market price of $267. He attributes its valuation premium largely to investor enthusiasm, fueled by Nvidia CEO Jensen Huang's suggestion that Marvell could become a $1 trillion company, implying a 5x growth from its current $233 billion market cap. Marvell also underperforms Broadcom in profitability metrics such as cash flow from operations to sales ratio (23.6% vs. Broadcom's 44.5%) and return on invested capital (12.79% vs. Broadcom's 20.3%), and has historically had more volatile and sometimes negative returns. Parkev explicitly states he would not be buying Marvell at these valuations and does not own it.

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