ASML Holding N.V. vs. Marvell Technology: Which Technology Stock Is a Better Buy in 2026?

As the global demand for processing power continues to climb, investors are evaluating the hardware companies that make modern computing possible. Is ASML Holding N.V. (NASDAQ:ASML) or Marvell Technology (NASDAQ:MRVL) the better investment for 2026?

ASML provides the essential lithography systems needed to manufacture the world's most advanced chips. Marvell focuses on the connectivity and storage architecture that powers modern data centers. While both are central to the semiconductor stock landscape, they occupy very different niches in the hardware supply chain.

The case for ASML Holding N.V.

ASML is a critical supplier that provides the massive hardware and software systems required to mass-produce microchips. With over 44,000 employees and operations across the U.S., Asia, and Europe, the company serves the world's leading semiconductor manufacturers. It specializes in lithography, which is the process of using light to print patterns onto silicon wafers. By controlling the most advanced segment of this market, the company has established a unique and vital role in the global technology supply chain.

In the fiscal year ended Dec. 31, 2025, revenue reached nearly $37.2 billion, representing roughly 15.6% growth compared with the prior fiscal year. This growth helped the company generate net income of approximately $11.0 billion, up from roughly $8.6 billion a year earlier. This performance resulted in a net margin of approximately 29.4% for the latest fiscal year. The company continues to see strong demand for its extreme ultraviolet lithography systems as chipmakers shift to more complex designs.

As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 0.1x. This ratio, which measures total debt relative to shareholders' equity, indicates a conservative level of borrowing. The current ratio of nearly 1.3x shows the company has enough short-term assets to cover its immediate liabilities. Free cash flow, which is the cash remaining after capital expenditures, was roughly $12.1 billion. This robust cash generation supports continued research and development for the next generation of chip-making tools.

The case for Marvell Technology

Marvell Technology designs the data infrastructure solutions that power artificial intelligence, cloud computing, and networking. The company employed nearly 7,480 people as of its latest annual report filed in early 2026. Marvell operates primarily through sales to large manufacturers and distributors, though it faces high customer concentration. One distributor accounted for roughly 37% of net revenue, and one direct customer accounted for approximately 14%. The company also maintains a custom chip partnership with Alphabet and works with Nvidia on AI infrastructure.

In the fiscal year ended Jan. 31, 2026, revenue reached approximately $8.2 billion. This was a significant increase of roughly 42.1% year over year. Unlike in previous years, when the company reported losses, it achieved a net income of nearly $2.7 billion. The company reported a net margin of roughly 32.6%, a stark improvement from the net losses reported in previous periods. This swing to profitability was driven by high demand for networking and storage chips used in AI data centers.

According to its January 2026 balance sheet, the debt-to-equity ratio is approximately 0.3x. The current ratio of nearly 2.0x indicates a strong ability to meet short-term financial obligations. Free cash flow for the period reached nearly $1.4 billion. Note that stock-based compensation represented roughly 33.8% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement. This high level of stock-based compensation is common among fast-growing technology companies.

Risk profile comparison

ASML faces significant risks from evolving international trade restrictions that limit its ability to sell certain high-end lithography equipment to specific regions. Because its machines are incredibly expensive and complex, any downturn in the global chip market can cause customers to delay or cancel orders. Furthermore, the company relies on a complex network of thousands of specialized suppliers. Any disruption in that chain could hinder its production capacity and affect overall financial performance.

Marvell faces risk from high revenue concentration, as a small group of customers and distributors accounts for a massive portion of its total sales. The company also navigates strict U.S. export controls and tariffs, which create uncertainty about its sales in China. Competitive pressure is another concern, as rivals like Broadcom and custom silicon projects from cloud giants could limit its market share. Additionally, the company relies on third-party foundries like GlobalFoundries, making it vulnerable to supply chain shocks.

Valuation comparison

Marvell trades at a significantly higher valuation than ASML, based on both future earnings estimates and sales over the past 12 months.

Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

The P/S ratio measures the market value of a company relative to its sales over the past twelve months. Marvell is trading at roughly 24.6x sales, while ASML is valued at approximately 17.2x. Looking at Forward P/E, which compares the stock price to future earnings estimates, Marvell is also the more expensive of the two stocks at 62.5x compared to 42.0x for ASML.

Which stock would I buy in 2026?

As conditions stand now, I would lean toward buying Marvell Technology in 2026.

Admittedly, investors do not have a "bad" choice in this regard. ASML is a cheaper chip stock that is dominant in the lithography machines used to make the most advanced semiconductors. This makes it an irreplaceable part of the semiconductor industry, and amid that dominance and lower valuation, it could be a more suitable choice for more risk-averse investors.

In contrast, Marvell is not similarly dominant in data center infrastructure. As previously mentioned, it has a formidable competitor in Broadcom.

Nonetheless, ASML is a significantly slower-growing company than Marvell. Considering that its revenue growth rate is more than double that of ASML, Marvell is probably worth the 43% premium in its P/S ratio. Also, the fact that Marvell stock has increased at a faster rate than ASML over several time periods appears to confirm that it is the faster-growing stock.

Ultimately, investors need to assess their risk tolerance for these two stocks. However, for investors who can tolerate somewhat more risk, Marvell is the stock more likely to drive higher returns over time.

Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Broadcom, Globalfoundries, Marvell Technology, and Nvidia. The Motley Fool has a disclosure policy.