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

Parkev Tatevosian, CFA•Sep 28, 2026

Summary

Parkev provides a comparative analysis of Broadcom and Marvell, focusing on their roles in the AI semiconductor industry. Parkev notes that demand for custom integrated circuits is surging, with visibility into 2028, and emphasizes that revenue growth, profitability, and return on invested capital (ROIC) are critical metrics for evaluation.

**Broadcom**: Parkev highlights Broadcom’s phenomenal revenue growth—rising from $35 billion to $90 billion—and its impressive operating margin of 48.6%. With an ROIC of 25.75%, Parkev considers the company highly efficient and fundamentally sound. Using a discounted cash flow model, Parkev calculates a fair value of $523, suggesting a 48% upside from the current price of $353, and has added Broadcom to their own portfolio.

**Marvell**: Parkev notes Marvell's growth potential in data center connectivity but points out that its operating margin is significantly lower at 16.8%. Parkev believes the current valuation—trading at a forward P/E of 39—is unjustifiably high compared to Broadcom’s P/E of 18. Based on an internal model, Parkev calculates a fair value of $207, indicating a potential downside of 22% from the current price of $266.

Parkev concludes that while Marvell offers more speculative growth potential due to its smaller size, the valuation gap makes Broadcom the clear preference for long-term investors. Parkev explicitly states a preference for Broadcom and has no interest in purchasing Marvell at its current market valuation.

Mentioned Stocks

AVGO

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev prefers Broadcom due to its superior operating margins (48.6%), high ROIC (25.75%), and lower valuation (18 P/E). Parkev calculates a fair value of $523, indicating a 48% upside from the $353 price point.

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MRVL

Sentiment: SELL

Reasoning: Parkev believes Marvell is overvalued with a forward P/E of 39. Despite growth potential, the current price of $266 exceeds Parkev's calculated fair value of $207, implying a 22% downside risk.

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