Broadcom vs. Navitas Semiconductor: Which AI Chip Maker Stock Is a Better Buy in 2026?

As the artificial intelligence boom matures, investors must decide between proven giants and emerging specialized players. Comparing Broadcom (NASDAQ:AVGO) and Navitas Semiconductor (NASDAQ:NVTS) reveals two very different paths to potential long-term returns.

Broadcom provides essential networking and software infrastructure for the world's largest data centers and enterprises. In contrast, Navitas is a smaller firm specializing in next-generation materials such as gallium nitride (GaN) to improve power efficiency. While both participate in the shift toward advanced computing, their financial profiles and market positions are distinct.

The case for Broadcom

Broadcom designs and supplies a vast range of semiconductors and infrastructure software used by government agencies and massive corporations. Its portfolio spans networking connectivity, wireless devices, and the VMware enterprise ecosystem, making it a central pillar in modern data centers. You should note that sales to distributors accounted for nearly 48% of net revenue in fiscal 2025, and such customer concentration adds a layer of risk to the business.

This scale has turned Broadcom into one of the most prominent semiconductor stocks in the market. In FY 2025, the company reported revenue of approximately $63.9 billion, representing growth of roughly 24% compared to the prior year. During the same period, it generated net income of nearly $23.1 billion, resulting in a net margin of approximately 36.2%.

Broadcom maintains a stable financial position with a debt-to-equity ratio of nearly 0.8x, which compares total debt to shareholder equity. The company produced free cash flow, which is the cash left over after paying for operations and equipment, of $26.9 billion. Note that stock-based compensation (SBC) represented roughly 28% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.

The case for Navitas Semiconductor

Navitas focuses on gallium nitride (GaN) and silicon carbide devices that allow power systems to run cooler and more efficiently. The company is currently executing its "Navitas 2.0" strategy, which pivots away from consumer electronics toward high-power markets like AI data centers and industrial electrification. A significant milestone in this transition is the 2026 announcement of a partnership with Nvidia Corp (NASDAQ:NVDA) for advanced power delivery systems.

However, the transition has not yet translated into revenue growth for the small-cap player. In FY 2025, revenue fell to $45.9 million, a decline of roughly 45% from the prior fiscal year. This decline was accompanied by a wider net loss of approximately $117.0 million for the year.

On the balance sheet, Navitas reported a debt-to-equity ratio of close to 0x as of December 2025. The company reported negative free cash flow, -$44.4 million, in FY 2025 as it continues to invest in its strategic pivot.

Risk profile comparison

Broadcom faces risks related to AI market volatility, as any reduction in infrastructure spending by major customers could hurt its results. The company is also highly dependent on Taiwan Semiconductor Manufacturing Co (NYSE:TSM). TSMC produces nearly 95% of Broadcom’s wafers, leaving it vulnerable to supply chain disruptions or trade tensions. Furthermore, its reliance on a small number of distributors and end customers means that losing a single major account could materially impact revenue.

Navitas faces a critical supply chain risk because TSMC plans to exit gallium nitride production by mid-2027. This forces Navitas to successfully transition its manufacturing to partners like GlobalFoundries (NASDAQ:GFS) or X-Fab Silicon Foundries, a move that carries significant execution risk. Additionally, the company has seen recent leadership changes and insider stock sales, which may introduce uncertainty regarding its long-term corporate governance.

Valuation comparison

Broadcom offers massive cash flow and established market dominance, while Navitas represents a high-risk bet on next-generation power materials. Valuation reveals Broadcom is significantly cheaper relative to sales.

Sector benchmark uses the SPDR XLK sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

Navoitas Semiconductor was one of the most exciting young chip companies at the start of the decade. The company’s focus on GaN chips gave it a foothold in the booming renewable energy sector, because GaN chips are far better at handling high heat/power than silicon, which gets brittle at high temperatures. The end market for its GaN chips -- EVs, solar panels, and other green energy sources — appeared potentially boundless. In practice, mobile phone chargers were its biggest business.

The move to focus on AI customers and to truly pursue EVs is understandable, and potentially lucrative, but so far it’s been a flop. The steep decline in revenue resulted from abandoning some markets and the high cost of wholesale realignment of the business. Wall Street consensus estimates now don’t see Navitas exceeding 2024 revenue levels until 2028.

Broadcom is an example of a company firing on all cylinders, feeding the insatiable AI data center demand with its chips. Analysts see revenue jumping by an astounding 66% to $106 billion this year, with profits almost doubling to more than $44 billion.

Don’t overthink the opportunity with AI chipmakers here. With a better price-to-sales ratio and huge growth in 2026, AVGO is the ticker to pick.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom, GlobalFoundries, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.