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

Core Insights - The article compares two semiconductor companies, Credo Technology Group Holding Ltd. (CRDO) and Marvell Technology, Inc. (MRVL), focusing on their roles in the AI-driven data center market [2][3][21] Company Overview - CRDO specializes in high-speed connectivity solutions, particularly in Ethernet and Active Electrical Cables (AECs), which are crucial for data centers [5][10] - MRVL has a diversified product portfolio that includes custom ASICs, data center switches, and 5G chips, with a strong focus on AI infrastructure [10][11] Financial Performance - CRDO's fiscal 2025 revenues rose 126% year over year to $436.8 million, with fourth-quarter revenues surging 179.7% year over year to $170 million [5][10] - MRVL's data center revenues increased 76% year over year to $1.44 billion, driven by demand for custom AI silicon and electro-optics products [11][12] Growth Drivers - CRDO's AECs are gaining traction due to their reliability, with a product line that is expected to remain a growth engine [5][6] - MRVL's growth is supported by solid demand for its storage and networking chips, particularly from the 5G infrastructure and data center markets [10][11] Market Trends - The shift from copper to optical connectivity in AI infrastructure presents significant growth opportunities for MRVL's Co-Packaged Optics technology [13] - Both companies are positioned to benefit from the increasing reliance on high-performance solutions in the rapidly expanding AI-server market [8][12] Competitive Positioning - CRDO's integrated system-level approach provides a competitive edge, allowing for faster innovation cycles and cost efficiency [6] - MRVL's collaboration with NVIDIA to integrate NVLink Fusion into its custom silicon platform enhances its capabilities in developing next-generation AI infrastructure [12] Stock Performance and Valuation - Over the past month, CRDO and MRVL have registered gains of 38.2% and 20.2%, respectively [17] - CRDO is trading at a forward 12-month price/sales ratio of 17.40X, significantly higher than MRVL's 7.36X [18] Analyst Estimates - Analysts have revised CRDO's bottom line estimates upward significantly in the past 60 days, indicating strong growth expectations [20] - MRVL has seen marginal upward estimate revisions, reflecting steady performance [20] Investment Recommendation - CRDO currently holds a Zacks Rank 1 (Strong Buy), while MRVL has a Zacks Rank 3 (Hold), suggesting that CRDO may be a better investment pick at this time [21]