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Image source: The Motley Fool. Nvidia and Broadcom are tackling the same problem from two different standpoints <\/p>\n
Nvidia’s GPUs are fantastic for all sorts<\/a> of computing applications. These units can perform multiple calculations in parallel, giving them incredible processing speeds for the world’s most complex workloads. When thousands of these units are combined in clusters, they can deliver incredible processing power and speed, allowing them to train and run AI models.<\/p>\n However, because GPUs can handle a wide variety of workloads, they don’t excel in one particular area. There’s also a lot of wasted capabilities, causing clients to overpay for features they don’t need. That’s where Broadcom’s custom AI chips start to become attractive.<\/p>\n Broadcom is partnering directly with AI hyperscalers to design custom AI chips that are tailored for their particular workloads. The best example is the Tensor Processing Unit (TPU) that Broadcom has designed in collaboration with Alphabet. The TPU can outperform GPUs as long as the workload is configured properly, and do it at a more cost-effective price point. Several companies have collaborated with Broadcom over the past few years to design custom AI chips; now, the design process is nearing completion, and order fulfillment is beginning. This will lead to huge growth for Broadcom over the next few years, potentially allowing it to surpass Nvidia.<\/p>\n Broadcom’s custom AI chip business is gaining momentum <\/p>\n When you’re discussing business momentum, it’s hard to deny what Nvidia has going on. Last year, its revenue growth rate started to decline, which most investors assumed would continue for some time. Then, Nvidia started reporting accelerating growth numbers.<\/p>\n Story Continues <\/p>\n Wall Street analysts project it will continue this rise next quarter, with 96% growth expected. That’s incredible, but can Broadcom match it? Over that same time frame, Broadcom’s growth hasn’t looked nearly as impressive. However, Broadcom is a far more diversified business, which drags down its overall growth rate because it isn’t completely leveraged to the AI build-out.<\/p>\n But all of that could change over the next year as Broadcom’s custom chip business really starts to take hold. Management believes that its custom chip business could generate $100 billion in revenue during 2027 alone. That’s a major boost for Broadcom, which is why Wall Street analysts expect Broadcom’s revenue to skyrocket over the next few quarters. For Q2, they expect 47% growth. In Q3, that projection is 78%. There’s a major growth pattern beginning with Broadcom, but it still falls a bit short of Nvidia’s current growth rate.<\/p>\n Despite that, Broadcom’s price tag is far greater than Nvidia’s.<\/p>\n The market is incredibly excited about Broadcom’s future and has given it a premium price tag. However, Nvidia is far cheaper despite showcasing better results.<\/p>\n I think this is a classic case of the market looking for a new, shiny toy rather than trusting old reliable. I’m a Broadcom investor and excited to see how its custom AI chip business grows<\/a> over the next few months. However, from a risk-reward standpoint, Nvidia is still the far better investment, as it’s growing faster and is far cheaper than Broadcom.<\/p>\n Should you buy stock in Nvidia right now? <\/p>\n Before you buy stock in\u00a0Nvidia, consider this:<\/p>\n The Motley Fool\u00a0Stock Advisor\u00a0analyst team just identified what they believe are the\u00a010 best stocks<\/a>\u00a0for investors to buy now\u2026 and\u00a0Nvidia\u00a0wasn\u2019t one of them.\u00a0The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.<\/p>\n Consider when\u00a0Netflix\u00a0made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you\u2019d have $462,983!*\u00a0Or\u00a0when\u00a0Nvidia\u00a0made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation,\u00a0you\u2019d have $1,375,447!*<\/p>\n That performance is why people listen. With a track record of\u00a0beating the S&P 500 by nearly 5x,\u00a0Stock Advisor\u00a0offers a distinct advantage. Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built for the long haul.<\/p>\n See the 10 stocks \u00bb<\/a><\/p>\n *Stock Advisor returns as of June 2, 2026. <\/p>\n Keithen Drury<\/a> has positions in Alphabet, Broadcom, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Broadcom, and Nvidia. The Motley Fool has a disclosure policy<\/a>.<\/p>\n<\/a> NVDA Revenue (Quarterly YoY Growth)<\/a> data by YCharts<\/a> <\/p>\n
<\/a> AVGO Revenue (Quarterly YoY Growth)<\/a> data by YCharts<\/a> <\/p>\n
<\/a> NVDA PE Ratio (Forward)<\/a> data by YCharts<\/a> <\/p>\n