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Broadcom’s strong earnings last week raised concerns it could eat into Nvidia’s market share
Strong quarterly results from Broadcom could signal strong competition for AI heavyweight Nvidia.
Broadcom (AVGO) last week reported record quarterly sales that showed strong demand for its AI offerings and introduced a big new mystery customer reports suggested could be ChatGPT maker OpenAI. Citi analysts said the results and growing commitments from buyers—many which are also Nvidia (NVDA) customers—could suggest an estimated $12 billion hit to Nvidia’s 2026 sales.
Citi analysts on Monday maintained a “buy” rating on Nvidia stock but trimmed their target price to $200 from $210, citing concerns about threats to Nvidia’s dominance after Broadcom (AVGO) said last week it expects demand from major Big Tech clients to shift in favor of its custom AI chips, potentially setting it up to win more market share.
Broadcom’s stock climbed more than 3% to close Monday around $346, adding to a nearly 10% jump Friday after its better-than-expected earnings. Nvidia shares ticked less than 1% higher to end today around $168 after taking a 3% hit in Friday’s session. (Read Investopedia’s full coverage of today’s trading here.)
“People freaked out a bit after Broadcom earnings,” Melius Research analysts led by Ben Reitzes told clients Monday. They see Broadcom as a “Magnificent 8” stock—worthy of joining the group of seven tech heavyweights—with significant room to rise.
“To be clear, we have always taken a view that Nvidia’s share of AI compute would actually fall over time as chip designers like Broadcom would gain about 30% of share and a gang of other merchants led by AMD would take at least 10%,” they said.
Melius analysts, who reiterated “buy” ratings and bullish targets of $240 for Nvidia and $415 for Broadcom, said they believe both chipmakers are likely to be winners of the rapidly growing AI computing and networking market.
Nvidia’s potential to build an Apple-like (AAPL) “ecosystem” with developers loyal to its programmable architecture may also be underestimated, they suggested, drawing parallels to the iPhone maker’s ability to sustain long-term gains even as its share of the market for smartphones declined.
If Broadcom were able to capture even 20% of an estimated $2 trillion addressable market for 2030 while Nvidia holds onto a 40% share—down from over 70% currently—both stocks “are going a heck of a lot higher,” Melius said. They see both stocks more than doubling in value the next three years.
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