Is Nvidia Still the Best AI Stock to Buy in 2026, or Is This Challenger?

Nvidia (NASDAQ: NVDA) has long been considered the ultimate artificial intelligence (AI) stock to buy. Why? Because the company is the maker of the key element needed for the most crucial AI tasks: the chip for the training and inference of large language models. Others also make AI chips, but Nvidia's graphics processing units (GPUs) offer the highest performance, making them the most sought-after on the market.

All of this has translated into surging revenue growth quarter after quarter. In the latest full year, Nvidia's revenue jumped 65% to $215 billion, a record level. And stock performance has followed, with the shares climbing 1,300% over the past five years.

In spite of this stellar performance, you may be wondering if Nvidia is still the best stock to buy. After all, other tech companies have been innovating in the field and growing their products and services. One in particular, a chip and networking innovator, stands out. So right now is a great time to ask the following question: Is Nvidia still the best AI stock to buy in 2026 -- or is this challenger?

Image source: Getty Images.

A networking giant

The challenger I'm talking about is Broadcom (NASDAQ: AVGO). The company is a networking giant, with about 99% of internet traffic touching at least one Broadcom chip. And Broadcom's range of products is present in a variety of settings, from your smartphone to major data centers.

In recent years, the company, like many other tech giants, has turned its attention to AI, and this has led to explosive growth for its switches and routers -- and Broadcom also has made a splash with compute designed to accelerate certain AI tasks.

How is the company faring when it comes to competing with market giant Nvidia? The great news is that Broadcom doesn't compete directly with the chip behemoth. What I mean by this is their chips are different, so a customer probably isn't comparing Nvidia directly with Broadcom. While Nvidia's chips are general-purpose, Broadcom makes custom chips meant for a specific task. Because of this, both of these companies will likely continue to grow, undisturbed by each other.

Like Nvidia, Broadcom has seen fantastic growth in recent quarters thanks to demand for its AI products. In the latest period, AI revenue climbed more than 100% to $8.4 billion. And the company announced a forecast for incredible growth in AI chips: It predicts AI revenue from chips may reach more than $100 billion in 2027.

A deep relationship with hyperscalers

And the company said its relationship with its six hyperscaler customers "is deep, strategic, and multiyear." So we could see significant growth from Broadcom this year and in the years to come, particularly considering tech giants' major investment in infrastructure. Some of the biggest tech companies have pledged to spend nearly $700 billion this year alone.

Meanwhile, Nvidia, too, continues to deliver solid growth -- and the company's annual chip update is just ahead, with Vera Rubin availability on track for later this year. So far, the company's new releases have met with explosive demand, often surpassing supply. All of this means we should expect more growth from Nvidia in the coming quarters, too.

Now, let's return to our question: Is Nvidia still the AI stock to buy, or is it Broadcom? As mentioned, both of these players are on track to benefit from the current and next stages of AI growth -- and given that their chips are different, they aren't likely to upset each other's market position.

But one thing in particular stands out right now, and that's valuation. While Broadcom still is a reasonable buy, Nvidia stock is dirt cheap in relation to forward earnings estimates.

NVDA PE Ratio (Forward) data by YCharts

Nvidia's valuation has dropped significantly, even as earnings continue to march higher and demand remains strong. I see this as a fantastic buying opportunity -- and others may too, which could result in a pop in the stock in the months to come.

So, while Broadcom makes a compelling addition to any AI portfolio, thanks to valuation at the moment and growth prospects, Nvidia remains the best AI stock to buy in 2026.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom and Nvidia. The Motley Fool has a disclosure policy.