Nvidia and Broadcom are the two biggest ways to bet on the AI chip boom, and both have made shareholders substantial returns. Over the past year, Broadcom has been the better stock performer, but an analyst looking forward gives the edge to Nvidia because it is growing faster, trades at a cheaper forward earnings multiple (about 20× versus Broadcom's 25×), and remains more central to AI infrastructure, though Broadcom offers more revenue diversification.
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Nvidia and Broadcom have both delivered extraordinary returns over the past five years—$1,000 invested in Nvidia in mid-2021 would be worth about $10,100 today, versus about $9,100 in Broadcom. Over the past 12 months, though, Broadcom pulled ahead, turning $1,000 into roughly $1,440 compared to about $1,280 for Nvidia, as Nvidia's stock cooled in 2026 even as its business kept booming.
Why it matters
Both companies profit from the AI chip build-out, but in different ways. Nvidia remains the default hardware provider for training and running large AI models, with data center revenue of $75.2 billion（約12兆円） climbing 92% year over year in its most recent fiscal quarter. Broadcom designs custom AI accelerators for a handful of the largest cloud companies and, through its acquisition of VMware, also operates a large infrastructure-software business—offering more diversification if AI chip demand cools. For investors choosing between them today, the choice hinges on appetite for growth versus stability.
What to watch
Nvidia trades at about 20 times forward earnings, cheaper than both Broadcom (about 25 times forward earnings) and the broader market, despite growing faster. Broadcom's AI chip revenue jumped 143% year over year last quarter to $10.8 billion（約1.7兆円）, and management sees roughly $16 billion（約2.6兆円） this quarter. The analysis favors Nvidia going forward because it is growing faster and sits more squarely at the center of AI computing, yet trades at a lower valuation multiple.
Nvidia and Broadcom have approached the AI chip boom from different angles. Nvidia sells off-the-shelf GPUs (graphics processing units) that remain the default hardware for training and running large AI models; demand still outstrips the company's supply. In its most recent fiscal quarter ended in late April, Nvidia hit record revenue of $81.6 billion（約13兆円）, up 85% year over year and 20% from the prior quarter. Broadcom, by contrast, designs custom AI accelerators and networking chips for a handful of the largest cloud companies—a more concentrated but, so far, faster-growing segment. Broadcom's AI chip revenue jumped 143% year over year last quarter, though off a much smaller base.
The valuation picture has shifted in Nvidia's favor. Historically, the knock on Nvidia was valuation, but after lagging in 2026 even as earnings climbed, Nvidia now trades at about 20 times forward earnings—cheaper than the broader market and cheaper than Broadcom's 25× multiple. This matters because Nvidia is also growing faster, creating what an analyst describes as an unusually attractive setup: the faster-growing company at the lower price. Broadcom's premium valuation reflects its broader business—not just custom AI chips but also a wide range of other semiconductors and, since acquiring VMware, a large and profitable software operation. This week, Broadcom also deepened its long relationship with Apple through a multiyear manufacturing commitment expected to exceed $30 billion（約4.8兆円）, adding another revenue pillar.
For investors evaluating which to own today, the trade-off is straightforward. Nvidia offers faster growth and a lower valuation multiple, positioning it more squarely at the center of AI computing. Broadcom offers diversification—if demand for AI chips falters, its software business and broader semiconductor portfolio could cushion the blow. Both remain excellent businesses, and the past year rewarded Broadcom more handsomely, but the forward case tilts toward Nvidia's combination of growth and price.
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