Marvell beats Arm as AI stock pick on 65.2x forward P/E

The comparison lands as AI infrastructure spending keeps reshaping which chip suppliers investors reward. Arm's royalty model spreads its blueprints across mobile, automotive, and data centers without the cost of making chips, but that model is also exposed as Nvidia and Qualcomm build more custom silicon and open-source architectures advance. Marvell's bet is narrower and more concentrated: data center connectivity and storage made up roughly 74% of FY 2026 revenue, and its ten largest customers represent about 82% of sales.

Marvell's turnaround from net losses in the two prior years to $2.7 billion in net income in FY 2026, at a 32.6% net margin, is the financial backdrop for the analyst's preference. Arm's FY 2026 revenue grew 22.8% to $4.9 billion with a 18.4% net margin, a solid result that is still framed as less attractive on valuation. Both companies show heavy stock-based compensation relative to operating cash flow — 69% for Arm and roughly 33.8% for Marvell — a caveat the piece raises before the verdict.

What tips the call is the forward revenue path. Marvell announced on Oct. 6 that it expects to reach $20 billion by FY 2028, with a FY 2031 target of $70 billion to $90 billion, figures the analyst treats as evidence of AI demand. Arm, meanwhile, introduced its Arm AGI CPU in March, a move into AI central processing units for data centers. Marvell's cheaper valuation and faster growth make it the no-brainer pick between the two, though the concentration and geopolitical risks listed suggest that view rests on a few large customers continuing to spend.