Micron Technology, Inc.

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Somewhat Bullish +42

Marvell vs. Micron: Which AI Chipmaker Is the Better Buy Right Now?

📈 Marvell Technology (NASDAQ: MRVL) and Micron Technology (NASDAQ: MU) have both surged in 2026, with shares up 93% and 74%, respectively, driven by AI capital spending from hyperscalers.

💾 Marvell specializes in optical networking chips and custom AI accelerators (XPUs), including Microsoft's Maia chips and Amazon's Trainium chips.

🤝 Nvidia recently invested $2 billion in Marvell to ensure chip compatibility with its NVLink Fusion infrastructure for high-speed data interconnects.

🔮 Management expects Marvell's acquisition of Celestial AI to reach a $500 million annualized revenue run rate by 2028 and $1 billion by 2029.

🚀 Microsoft plans to use more next-generation Maia chips for internal AI training, which could significantly boost Marvell's order volume in fiscal 2028.

🤫 Reports indicate Marvell is in talks with Google to develop a custom AI accelerator as an alternative to Google's TPUs, alongside a memory processor.

📈 Analysts project Marvell's earnings per share (EPS) will climb from $3.83 this year to $7.50 two years from now.

💰 While Marvell currently trades at 42.5 times forward earnings, that multiple is expected to drop to 21.7 times in two years as growth stabilizes.

📉 Micron benefits from a massive supply shortage in memory chips, acting as a bottleneck for AI training and inference workloads.

🚧 Although rival chipmakers are investing heavily, new fabrication capacity takes years to ramp up, meaning the supply shortage is likely to last through 2027.

🔥 Micron's DRAM prices climbed 66% sequentially last quarter, leading to a 74% sequential revenue increase and a gross margin jump to 75%.

⏳ The memory chip business is cyclical; current oversupply capacity built today could lead to a significant crash in earnings power by 2029.

📊 Analysts expect Micron's EPS to rise from $57.95 this year to $101.07 in two years before facing potential declines in 2029 due to the demand cycle shifting.

💸 Because of the cyclical nature and future risk, investors are valuing Micron at only 8.6 times earnings compared to a historical range of 3 to 6 times during peaks.

🏆 The article concludes that despite Micron's high current profits, Marvell offers steadier earnings growth at a fair price based on current stock prices.

⚠️ The Motley Fool Stock Advisor team recently identified 10 best stocks for investors to buy now, and notably did not include Micron Technology in their list.

Bullish Signals
  • Micron's memory chip pricing is set to keep soaring through 2027, with DRAM prices climbing about 66% sequentially last quarter and NAND prices rising even faster.
  • Micron has seen profits soar as it benefits from a massive supply shortage, with DRAM revenue up 207% year over year and the NAND segment showing 82% sequential growth.
  • Gross margin for Micron is climbing 18 percentage points to 75%, driven by higher chip prices and strategic production capacity constraints.
  • Micron plans to invest $25 billion in capital expenditures this year and at least $35 billion in 2027 to meet the growing demand for memory chips.
  • Analysts currently expect Micron's earnings per share to climb from $57.95 this year to $101.07 in two years as pricing remains high and unit production increases.
Risk Factors
  • Micron faces a cyclical downturn risk as current production capacity will eventually lead to market oversupply, causing significant overhead costs and crashes in profit margins by 2029.
  • The stock trades at 8.6 times earnings despite historically trading only between 3 and 6 times P/E at the peak of its cycle, suggesting limited upside potential unless demand exceeds analyst expectations.
  • Micron was not included in The Motley Fool Stock Advisor's list of 10 best stocks to buy now, raising concerns about its relative investment appeal compared to peers.
  • Analysts project Micron earnings to drop significantly in 2029 as the supply/demand equilibrium shifts, contradicting current expectations of steady growth through 2028.
  • Micron's heavy capital expenditure plans ($25 billion in 2026 and $35 billion in 2027) may become a drag on profitability if new capacity ramps up faster than market demand can absorb.
Full Analysis
Marvell Technology (NASDAQ: MRVL) and Micron Technology (NASDAQ: MU) have emerged as top semiconductor performers in 2026, with shares rising 93% and 74% respectively, driven by massive hyperscaler capital spending. Marvell specializes in optical networking chips and custom AI accelerators known as XPUs, designing Microsoft’s Maia chips and previously Amazon’s Trainium chips while maintaining strong relationships with Alphabet, Meta, and Nvidia. A $2 billion investment from Nvidia ensures compatibility for high-speed interconnects, and an acquisition of Celestial AI is projected to generate $500 million in annualized revenue by 2028 and $1 billion by 2029. Additionally, Marvell is reportedly in talks with Google to develop custom AI accelerators as alternatives to TPUs, boosting analyst expectations for its earnings per share to increase from $3.83 this year to $7.50 two years out. Micron Technology benefits from a significant supply shortage affecting high-bandwidth memory (HBM) essential for AI training and inference chips. While memory chipmakers like Micron have limited production capacity expansion to avoid oversupply, causing prices to soar, the company plans to invest $25 billion in capital expenditures this year and at least $35 billion in 2027. This shortage is expected to persist through 2027 as new fabrication facilities ramp up. Micron’s recent financials reflect these conditions, with DRAM revenue climbing 74% sequentially and 207% year over year, and gross margins jumping to 75%. However, the cyclical nature of the memory business poses long-term risks; increased capacity could eventually lead to oversupply, margin contraction, and a potential crash in earnings power by 2029. Despite strong short-term prospects, Micron trades at only 8.6 times forward earnings compared to Marvell’s 42.5 times, partly due to concerns over future profitability once the supply-demand equilibrium shifts. Analysts currently project Micron’s earnings per share will grow from $57.95 this year to $101.07 in two years, but historical P/E ratios peak between 3 and 6 during cycles, suggesting the stock may not rise significantly unless demand exceeds expectations. Conversely, Marvell is expected to deliver more consistent earnings growth at a fair valuation, with its P/E multiple declining to 21.7 times by 2028. The article concludes that while Micron offers exposure to high memory pricing, investors might prefer Marvell for steady long-term gains as both companies aim to secure sockets for their respective technologies in an expanding AI server market.