QCOM is a better buy than MRVL due to valuation (trading at $181 vs $253 DCF) and strong margins/ROIC, even though it faces short-term AI headwinds and slower growth; data center revenue expected mid-to-late 2027.

Marvell and Qualcomm are semiconductor companies that adopt an asset-less business model . Marvell is already benefiting from the AI spending boom , while Qualcomm is poised to achieve significant revenue growth from this sector.

Based on the above, which of these two semiconductor stocks is a better buy option at current market prices? This is the question I want to answer in this video by comparing them across several important categories, including rating, to determine which one I see as the best buy today.

Looking at the past decade, you can see that both have achieved significant growth . Qualcomm is the largest company, having generated $44 billion in revenue over the past twelve months.

This figure represents an increase from about $25 billion 10 years ago. This is good in terms of growth, but it is not enough to even double revenues during that period.

However, Qualcomm has yet to take advantage of the increasing effectiveness of artificial intelligence. In fact, Qualcomm suffers from negative side effects. Smartphones are currently the primary category for Qualcomm's revenue and profits.

This sector is suffering because rising component prices are negatively impacting consumer purchases.

Meanwhile, Qualcomm has signed agreements with Meta Platforms and is in negotiations with other companies, including Amazon, to develop semiconductor technology for data centers.

These revenues are unlikely to be realized any time in 2026, but are likely to begin in mid- to late 2027. This could lead to significant growth for Qualcomm. It is reasonable to assume they can achieve success in this category because Qualcomm has successfully expanded from its core smartphone category into the automotive and personal computer sectors.

Qualcomm again leads in absolute terms at 23.5%, but Marvell is the best company in terms of growth and expansion. This was similar to what we found when looking at revenues as well.

In contrast, Qualcomm's operating margins fell from 30% to 23.5%. Return on invested capital measures how efficiently the management team allocates resources to develop new products and services that generate profits and cash flow for the company.

In this metric, Qualcomm once again holds the top spot with 22.9 %, a notable acceleration from the 12% it recorded in 2017.

Based on a forward price-to-earnings ratio , Marvell shares are trading at 42.5, which is almost three times more expensive than Qualcomm, which is trading at 14. As I mentioned, the main reason for this is the gains generated by artificial intelligence.

Marvell is already taking advantage of this growth opportunity and proving its success, while Qualcomm is only suffering from the downsides of the AI boom.

But in 2027, this story is likely to turn in Qualcomm's favor as it begins to generate revenue from data center customers and expand from there.

I also calculated Qualcomm's discounted cash flow, valuing the business at $253 per share . Compared to the current market price of $181, Qualcomm stock appears to be undervalued.

Regardless of whether I use a forward price-to-earnings ratio or a discounted cash flow valuation, Qualcomm stock appears to be undervalued.

For me, the comparison and answering this comparison seems relatively easy at this stage . Qualcomm is showing better profit margins and better returns on invested capital, while suffering from slower growth and the negative side effects of artificial intelligence.

So, if I had to decide today which of these two companies is better to buy , it would be Qualcomm. Indeed, I own Qualcomm shares and I am not interested in owning Marvell shares at any price close to these market prices.