NVIDIA vs. Broadcom: Which AI Chip Stock Is the Better Buy Now?

NVIDIA Corporation NVDA and Broadcom Inc. AVGO are two major U.S. semiconductor companies that sit at the center of today’s artificial intelligence (AI) boom. Both supply critical technology that powers AI infrastructure.NVDA designs the powerful graphics processing units (GPUs) that are used to train and run advanced AI models. On the other hand, Broadcom plays a key role with networking chips and custom ASICs (Application-Specific Integrated Circuit) that make hyperscale data centers more efficient.Both stocks have surged in recent years as AI adoption accelerates. Over the past year, shares of NVIDIA and Broadcom have soared 31.7% and 39.6%, respectively.NVDA vs AVGO: One-Year Price Return PerformanceImage Source: Zacks Investment ResearchSo, the question for investors now is which of the two offers more upside in the current market. Let’s break it down by looking at their financial performance, challenges and growth outlook.The Case for NVIDIA StockNVIDIA remains the backbone of the AI boom, with its GPUs powering everything from cloud data centers to self-driving vehicles. The company continues to dominate the AI infrastructure market, driven by explosive demand from cloud providers and enterprises. In the third quarter of fiscal 2026, NVIDIA’s revenues surged 62% year over year to $57 billion, while non-GAAP earnings per share (EPS) jumped 60% to $1.30.NVIDIA Corporation Price, Consensus and EPS Surprise NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation QuoteThe company’s new GPU architectures, Hopper 300 and Blackwell, are rapidly gaining adoption as customers race to expand AI capabilities. The Blackwell Ultra and upcoming Vera Rubin platforms could further cement NVIDIA’s leadership as the AI hardware race intensifies.NVIDIA’s most powerful growth engine continues to be its Data Center business. In the third quarter of fiscal 2026, the segment generated $51.22 billion in revenues, representing 89.8% of total sales. This marked a staggering 66% year-over-year increase and 25% sequential growth.The robust performance was mainly driven by higher shipments of the Blackwell GPU computing platforms that are used for the training and inference of large language models, recommendation engines and generative AI applications.NVIDIA’s partnership with OpenAI, which involves the construction of massive AI data centers powered by NVIDIA systems, is expected to boost long-term demand for its GPUs. The deal reinforces NVIDIA’s position as the dominant supplier of AI chips worldwide.The Case for Broadcom StockBroadcom has established itself as a critical player in the AI ecosystem. The company supplies networking chips and custom ASICs that allow hyperscale data centers to handle the enormous data traffic generated by AI workloads.Financially, the company is experiencing strong growth in the top and bottom lines. In the last reported financial results for the fourth quarter of fiscal 2025, Broadcom’s revenues jumped 28.2% year over year to $18.02 billion, while non-GAAP earnings per share (EPS) soared 37.3% to $1.95.Broadcom Inc. Price, Consensus and EPS Surprise Broadcom Inc. price-consensus-eps-surprise-chart | Broadcom Inc. QuoteThe company is benefiting from strong demand for its networking products and custom AI accelerators. Broadcom’s AI revenues grew 65% year over year in fiscal 2025, reaching $20 billion. This growth is driven by AI semiconductors and infrastructure software, with AI revenues expected to double year over year to $8.2 billion in the first quarter of fiscal 2026.Broadcom’s AI networking segment also experienced strong demand, with a $10 billion order backlog for AI switches, including the 102-terabit-per-second Tomahawk 6 switch. The company has secured record orders for DSPs, optical components and PCI Express switches, all of which contribute to its total AI-related order backlog of $73 billion in the fourth quarter of fiscal 2026.  This backlog represents nearly half of Broadcom’s consolidated backlog of $162 billion.Broadcom’s innovative products are also playing a crucial role in its expansion. In November, the company announced the availability of the Brocade X8 Directors and Brocade G820 56-port switch, the industry’s first 128G Fibre Channel platforms designed for mission-critical workloads and enterprise AI applications.NVDA vs. AVGO: Which Has the Stronger EPS Growth Outlook?Both companies will benefit from the surging demand for AI chips, but NVIDIA’s EPS growth profile appears stronger in the near term. The Zacks Consensus Estimate for NVDA’s current fiscal-year 2027 EPS indicates a year-over-year surge of 57.1%. On the other hand, estimates for Broadcom’s current fiscal-year 2026 EPS imply 49.9% growth.The long-term (three to five years) expected EPS growth for NVIDIA is also way higher than that for Broadcom. Currently, the long-term expected EPS growth rate for NVDA is 46.31% compared with Broadcom’s 35.66%.Valuation: NVDA Is Cheaper Than AVGOComparing the two stocks’ valuations, Broadcom currently trades at a lower forward 12-month price-to-earnings (P/E) multiple of 28.66 compared to NVIDIA’s 24.76. This suggests investors are paying a larger premium for AVGO stock, even though its forward earnings growth profile is lower than NVDA’s.NVDA vs AVGO: 12-Month Forward P/E RatioImage Source: Zacks Investment ResearchConclusion: NVDA Is the Better Buy Right NowBoth companies are benefiting from the ongoing AI boom. Broadcom has stable demand, a huge backlog and strong networking exposure. NVIDIA has stronger earnings growth prospects, direct exposure to AI compute demand and a stronger product pipeline. NVDA’s slightly cheaper valuation makes it a better investment option than Broadcom.Currently, NVIDIA has a Zacks Rank #2 (Buy), making the stock a must-pick compared with Broadcom, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks