AI Data Center Connectivity Showdown: CRDO and MRVL Battle for Market Dominance

The surge in artificial intelligence infrastructure investments has created unprecedented opportunities for semiconductor companies specializing in data center connectivity solutions. Two key players—Credo Technology Group Holding Ltd (CRDO) and Marvell Technology, Inc (MRVL)—are positioned at the forefront of this transformation, yet they approach the market with distinctly different strategies and product roadmaps.

Valuation Metrics Reveal Market Expectations

From a valuation perspective, CRDO commands a premium, trading at a forward 12-month price/sales ratio of 17.53X compared to Marvell’s more conservative 7.44X. This disparity reflects divergent market expectations. Notably, analysts have raised CRDO’s earnings estimates by 30% over the past 60 days, signaling strong confidence in its near-term growth trajectory. Marvell has seen only marginal upward revisions to its bottom-line forecasts, suggesting the market may be pricing in more modest expansion for the broader chipmaker.

Credo’s Focused Growth Engine

Credo’s competitive advantage centers on its specialization in data center connectivity. The company has established itself as the market leader in advanced electrical connectors (AECs)—the “de facto” standard for inter-rack connectivity. These cables, now transitioning from 100-gig to 200-gig per lane architectures, offer compelling advantages over optical solutions: up to 1,000 times greater reliability with 50% lower power consumption.

Looking beyond current AEC dominance, Credo has articulated five distinct growth pillars projected to unlock a $10 billion total addressable market—more than triple its addressable market from just 18 months prior. These include:

• Zero-Flap optics: A laser-based solution combining AEC-level reliability with optical performance, currently in data-center trials with broader sampling expected in fiscal 2026
• Active LED cables (ALCs): Micro-LED technology delivering row-scale connectivity up to 30 meters, with revenue anticipated in fiscal 2028 and a market opportunity exceeding twice the AEC market size
• OmniConnect gearboxes: Optimized for XDU connectivity in next-generation architectures
• IC solutions: Retimers and optical DSPs maintaining healthy momentum, with PCIe retimer design wins anticipated in fiscal 2026

Marvell’s Diversified Data Center Play

Marvell adopts a broader approach through its diversified semiconductor portfolio. The company has successfully pivoted toward data center specialization, which now represents 73% of revenue in fiscal Q3. The strategy relies on three interconnected pillars:

Custom silicon and interconnect solutions remain the primary growth driver. Marvell’s custom XPU silicon and electro-optic interconnect products capitalize on the industry shift toward high-speed PAM-based solutions. The company is ramping both 100-gig and 200-gig per lane AECs alongside PCIe Gen6 retimers, which are gaining broad traction with customers.

Data center switching infrastructure represents the second catalyst. Switch revenues are projected to exceed $300 million in fiscal 2026, accelerating to $500 million in fiscal 2027, driven by 12.8T platform demand and next-generation 51.2T ramp-ups. Development for 100T architectures is underway, positioning Marvell ahead of the competitive curve.

Strategic acquisitions reinforce Marvell’s portfolio. The pending acquisition of Celestial AI—expected to close in Q1 fiscal 2027—adds Photonic Fabric technology, a scale-up optical interconnect platform already deployed by major hyperscalers. Meanwhile, previous acquisitions of Inphi, Aquantia, Avera, and Innovium have layered in complementary capabilities.

Financial flexibility remains a strength: Marvell returned $1.35 billion through buybacks and dividends during fiscal Q3, demonstrating disciplined capital allocation even while investing heavily in R&D and M&A.

Investment Thesis and Recent Momentum

Recent price action tells an interesting story. Over the past month, CRDO declined 15.3% while MRVL fell 5.2%, suggesting divergent sentiment despite both companies’ favorable long-term positioning in the AI infrastructure boom.

The analyst community has rendered its verdict: CRDO carries a Zacks Rank #1 (Strong Buy) rating, while MRVL holds a Zacks Rank #2 (Buy) designation. This ranking differential reflects CRDO’s concentrated exposure to high-growth data center connectivity segments and more aggressive upward estimate revisions, versus Marvell’s more mature, diversified positioning.

For investors, the choice hinges on risk tolerance and time horizon. Credo offers focused leverage to the hottest connectivity trends with higher valuation risk, while Marvell provides diversification and financial stability at a more attractive entry point.