Broadcom (NASDAQ: AVGO) has emerged as one of the challengers to Nvidia (NASDAQ: NVDA in the race for artificial intelligence (AI) dominance. However, both semiconductor giants have delivered solid returns in recent months.
Over the past year, Broadcom stock has rallied 94.64% to $297.39. Nvidia, meanwhile, has gained 61.21% to $174.11, supported by record-breaking data center sales but weighed down by U.S. export restrictions to China and investor concerns that lofty expectations leave little room for error.
Broadcom’s momentum stems from its expanding role in supplying hyperscalers, such as Google and Meta, with application-specific integrated circuits (ASICs).
This strength was evident in its financials, with AI revenue increasing 77% year-over-year to $4.1 billion in the second quarter. The company now projects $5.1 billion in AI sales for the third quarter, nearly one-third of its total revenue.
Nvidia, however, remains the anchor of the AI hardware industry and is currently the world’s largest publicly traded company, boasting a market capitalization of more than $4 trillion.
Nvidia’s dominance
Notably, Nvidia continues to dominate GPU-driven AI infrastructure, reporting a 56% year-over-year revenue surge to $46.74 billion in the second quarter, including $41.1 billion from data centers.
Yet its stock has lagged Broadcom’s amid mounting risks such as export curbs limiting access to China, intensifying competition, and occasional disappointments against sky-high analyst expectations.
It is worth noting that Broadcom’s rally highlights investor confidence in its ability to capture market share in the rapidly expanding AI market. However, the company’s custom chips still fall short of Nvidia’s GPUs in performance, while escalating development costs remain a challenge.
The contrast highlights how investors are positioning themselves differently within the semiconductor sector: Broadcom’s surge signals confidence in its AI strategy, while Nvidia’s scale and global leadership position it better to sustain long-term dominance despite near-term pressures.
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