Nvidia vs. Broadcom: Which AI Chip Stock Is the Better Buy Right Now?

Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO) are the top artificial intelligence (AI) chipmakers by market cap, and both delivered record results in their most recent quarters.

Of the two, Broadcom has been the better investment in 2026 and over the last year, but Nvidia is the winner if you look further back. Its five-year and 10-year returns are much higher than Broadcom's.

Let's see how these two semiconductor stocks compare and which is the better buy.

Image source: Nvidia.

Comparing the numbers

Nvidia recently reported earnings for the first quarter of its 2027 fiscal year, which ended April 26. As usual, it was a blockbuster quarter, with revenue surging 85% year over year to $81.6 billion. Data center revenue jumped 92% to $75.2 billion.

In March, Broadcom reported earnings for the first quarter of its fiscal 2026, which ended Feb. 1. The results were impressive, albeit not as explosive. Revenue increased 29% year over year to $19.3 billion, but AI revenue specifically was up 106% to $8.4 billion.

Sales favor Nvidia, and it's also much cheaper, trading at 24 times forward earnings. Broadcom trades at 39 times forward earnings -- its share price increased 40% over the last three months, and its valuation has arguably gotten stretched.

However, Broadcom is also earlier in its AI growth curve, and earnings could ramp up quickly from here. Management believes revenue from just AI chips could reach $100 billion in 2027.

The bull case for each chipmaker

Although the AI chip market has gotten more competitive, Nvidia remains the clear leader. Nvidia GPUs are the default choice for AI companies, and its CUDA software helps keep customers on its platform. Sovereign AI has also become a significant revenue source -- Nvidia made more than $30 billion from it in 2026.

Broadcom is leading an increasingly important part of the market: custom silicon. All the largest hyperscalers now develop their own custom chips, called ASICs, and two of them (Alphabet and Meta Platforms) use Broadcom as a design partner.

Bloomberg Intelligence forecasts a 27% compound annual growth rate (CAGR) for the custom ASIC market through 2033, compared to a 16% CAGR for AI accelerator chips as a whole. Broadcom is the chipmaker better equipped to capitalize on that shift.

Is Nvidia or Broadcom the better buy?

Nvidia is the safer pick, as it earns more, trades at a lower valuation, and generates massive free cash flow (FCF) -- $97 billion in its 2026 fiscal year. Broadcom is better if you're looking for growth and don't mind taking on more risk, given its hyperscaler partnerships and position as the top custom chipmaker.

They're both good investments, and it doesn't need to be an either-or proposition. If you're bullish on AI, it makes sense to own Nvidia and Broadcom. Which one you prioritize depends on whether you want more safety with Nvidia or more growth potential with Broadcom.

Lyle Daly has positions in Alphabet, Broadcom, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Broadcom, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.