Micron Technology MU and Marvell Technology MRVL are two semiconductor stocks riding the artificial intelligence (AI) infrastructure wave — but in very different ways. Micron is focused on memory technologies crucial to powering AI models, while Marvell plays a key role in the custom silicon and data center connectivity space.

With the AI boom to continue driving growth for the semiconductor industry, the question remains: Which stock makes for a better investment pick today?  Let’s dive into the fundamentals, valuations, growth outlook and risks for each company.

The Case for Micron Stock

Micron is riding a powerful wave of demand for high-bandwidth memory (HBM) and DRAM products, especially as AI workloads surge. The company has made significant strides in AI-optimized memory solutions, with its HBM3E products gaining attention for their superior power efficiency and bandwidth.

In January 2025, NVIDIA revealed that Micron is a key supplier for its GeForce RTX 50 Blackwell GPUs, solidifying Micron’s positioning in the HBM market. Earlier this year, Micron revealed plans for a new HBM advanced packaging facility in Singapore, set to begin operations in 2026, with further expansions by 2027. This move aligns with Micron’s AI-driven growth strategy, ensuring diversified supply chains and increased packaging capacity for high-performance memory chips.

Despite Micron's efforts to capitalize on rising AI-related demand, margin pressures and pricing challenges raise red flags. While Micron’s top-line growth in the second quarter of fiscal 2025 was impressive, its profitability came under significant pressure. The company’s non-GAAP gross margin declined to 37.9%, down from 39.5% in the previous quarter, marking a sharp sequential fall. This deterioration was driven by weaker NAND flash pricing and ongoing startup costs at its new DRAM production facility in Idaho.

More concerning is the company’s margin outlook. For the third quarter, Micron guided for a gross margin of 36.5% at the midpoint, signaling further compression. This weaker-than-expected outlook, despite record sales in its HBM segment, indicates that margin pressures are likely to persist.

The Case for Marvell Stock

Marvell is benefiting from hyperscalers’ increasing reliance on custom silicon for AI workloads. In fiscal 2025, Marvell’s AI revenues exceeded its $1.5 billion target, and the company expects to “very significantly” surpass its $2.5 billion AI revenue projection in fiscal 2026.

Custom AI silicon and electro-optics products have positioned Marvell as a critical player in high-performance computing. The company’s partnerships with leading hyperscalers ensure sustained growth, with management confident that revenues from its custom XPU (accelerated computing) solutions will continue expanding in fiscal 2027 and beyond. In the last reported financial results for the fourth quarter of fiscal 2025, its total revenues and non-GAAP EPS surged 27% and 30%, respectively, year over year.

Marvell is also hitting its stride across AI-optimized custom compute, high-speed optics and networking. Its advanced optical interconnects (like the 1.6T PAM DSP) are helping data centers move faster while consuming less power — a critical advantage as AI infrastructure scales.

Additionally, the transition from copper to optical connectivity in AI infrastructure represents a massive opportunity. Marvell’s Co-Packaged Optics (CPO) technology and development of the industry's first 2nm silicon IP for cloud and AI workloads solidify its position in next-generation networking.

Marvell’s sustained focus on enhancing its presence across the high-growth, high-margin business is bearing fruit, with its non-GAAP gross margin remaining above 60% over the past several years. Despite ongoing macroeconomic uncertainties, Marvell forecasts that the first-quarter fiscal 2026 gross margin would be 60%, demonstrating its strong operational efficiency.

Stock Price Performance and Valuation of MU & MRVL

Over the past year, Micron shares have dropped 47.4%, higher than the decline of 31.3% in Marvell shares.

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MU is trading at a forward earnings multiple of 1.71X, way below its median of 3.22X, over the past three years. MRVL’s forward sales multiple sits at 4.99X, significantly lower than its median of 8.20X over the past three years.

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Marvell does seem pricey compared with Micron. MRVL’s valuations also reflect its high growth expectations and robust profitability. If the company sustains its execution, the premium could be warranted.

On the contrary, Micron’s falling profitability raises questions about its ability to capitalize on the booming AI market. If the company cannot maintain healthy margins, future earnings growth could be constrained.

How Do Zacks Estimates Compare for MU & MRVL Stock?

The Zacks Consensus Estimate for Micron’s 2025 sales and EPS implies year-over-year growth of 41.9% and 426.9%, respectively. However, estimate revisions for Micron’s fiscal 2025 EPS have remained highly volatile over the past 60 days.

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The Zacks Consensus Estimate for Marvell’s 2026 sales and EPS implies a year-over-year increase of 43.8% and 75.8%, respectively. However, unlike Micron, estimates for Marvell’s fiscal 2026 EPS have shown a consistent northward trend over the past 60 days.

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Conclusion: Micron vs. Marvell Stock 

Marvell’s leadership in AI-driven data center infrastructure, custom silicon and high-speed networking provides strong revenue visibility for years to come. While the stock trades at a premium valuation, its explosive growth prospects and strong financial execution more than justify the price.

On the contrary, while Micron remains a long-term beneficiary of the AI boom, the near-term headwinds, including ongoing margin contraction and pricing challenges, could weigh on the stock.

Considering these factors, along with favorable earnings estimate revisions, Marvell seems to be a better investment choice in the current market environment. While Marvell carries a Zacks Rank #2 (Buy), Micron has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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