What Does NVIDIA Offer That Marvell Does Not?
Investors buy Marvell Technology (MRVL) and NVIDIA (NVDA) to capture spending on artificial intelligence data centers, but the two companies generate revenue differently. NVIDIA sells the full AI system, while Marvell supplies custom chips for individual cloud customers and the components that connect chips inside a data center. Marvell has been the much stronger stock. It returned 222% over the past twelve months, compared with 25% for NVIDIA. What has each company told investors to expect from here?
What Marvell And NVIDIA Have Said Since August
Marvell recently raised its financial outlook, although NVIDIA still anticipates a faster pace of growth. On August 27, Marvell increased its fiscal 2027 revenue outlook to roughly $12 billion and lifted its fiscal 2028 outlook to about $18 billion, up from $16.5 billion a quarter earlier. This new outlook means revenue growth of about 50% in fiscal 2028, and it includes the custom business more than doubling.
Then, on October 6, Marvell raised its fiscal 2028 outlook again, to about $20 billion, and forecast fiscal 2031 revenue of $70 billion to $90 billion during its Investor Day. For context, the company generated $9.5 billion in revenue over the past twelve months.
NVIDIA delivered a different kind of update on August 26. Management provided a forecast a year ahead for the first time, projecting revenue growth of about 70% in fiscal 2028, though they noted supply constraints would hold that figure back. NVIDIA had no earlier forecast to raise. During the same call, the company said rising memory costs would pull its gross margin from 75% to a low of 71% to 72% in the fourth quarter.
What Do Marvell And NVIDIA Give Up For Sales?
Both companies expect lower gross margins in the coming quarters. Marvell guided its fiscal Q3 2027 gross margin to between 57.5% and 58.5%, down from the 58.9% it reported for Q2, both on a non-GAAP basis. Management said the main reason is the custom business, which is ramping up quickly.
Even so, Marvell expects its profit to grow faster than its sales. On the August call, the finance chief said non-GAAP operating margin was likely to enter Marvell’s 38% to 40% long-term target range in fiscal Q4 2027.
NVIDIA posted a gross margin of 75% in fiscal Q2 2027, and management expects it to bottom at 71% to 72% in Q4. The chip maker is also using its own balance sheet to back its customers. It has invested nearly $50 billion in frontier AI labs. Management expects AI labs to make up roughly a quarter of its business in the year ahead.
How Much Do Marvell’s Sales Cost Against NVIDIA’s?
NVIDIA comes out ahead on price-to-sales, growth, operating margin, and debt. Investors pay 26.1 times trailing sales for Marvell, compared with 18.3 times for NVIDIA. Marvell’s revenue grew 31% over the past twelve months, while NVIDIA’s grew 83%. During that same period, Marvell’s operating margin was 16.8%, well below the 65% reported for NVIDIA. Debt is small at both companies, representing 2.1% of market value at Marvell and 0.7% at NVIDIA.
Comparing Marvell’s P/E of 93.4 against NVIDIA’s 28.8 is a less reliable guide. Marvell’s net margin of 28% sits above its operating margin, so income from outside its operations lifted its earnings.
With the P/E ratio set aside, the fundamental evidence leans toward NVIDIA. Yet Marvell did one thing NVIDIA could not: it keeps raising its outlook, most recently lifting fiscal 2028 to about $20 billion at its October Investor Day. That is roughly two-thirds growth over the roughly $12 billion it expected for fiscal 2027 in August, close to NVIDIA’s roughly 70%. If Marvell lifts that forecast again when it reports fiscal Q3, the smaller company could be the one expecting the faster growth.
How To Act On MRVL?
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