Broadcom vs. Nvidia: If I Could Only Own One for the Next 5 Years, It Would Be This One

If you're looking for a company that's benefiting from the massive spending on artificial intelligence (AI), it's hard to go wrong with Nvidia (NASDAQ: NVDA) or Broadcom (NASDAQ: AVGO).

Both are making a fortune selling the technology needed to build and operate AI data centers. And with major technology companies continuing to pour money into AI infrastructure, there's reason to believe both stocks have plenty of room to grow.

But if I could own only one of these companies for the next five years, I'd choose Nvidia. That's why I continue to hold my shares. Broadcom has built an outstanding business around custom AI processors and networking equipment. But Nvidia has a few advantages that I believe make it the better long-term investment.

Image source: The Motley Fool.

Nvidia is still the king of AI computing

There's something remarkable about Nvidia's growth. Despite becoming the world's most valuable company, the chipmaker is still posting revenue growth that would be impressive for a business a fraction of its size.

Its fiscal 2027 second-quarter results showed revenue jumping 106% from a year ago to $96.2 billion, while net income increased 126% to $59.7 billion. Its data center business alone generated $89 billion in revenue, up 117%. And Nvidia expects another big quarter. Management projected fiscal third-quarter revenue of $108 billion, plus or minus 2%.

"The surge in AI demand is driving a global infrastructure build-out, supported by an expanding and diverse set of growth opportunities, spanning hyperscalers, AI labs, AI natives, enterprises, and sovereign customers," Chief Financial Officer Colette Kress said. "We expect to grow revenue by approximately 70% in fiscal 2028."

Nvidia's competitive advantage goes well beyond its graphics processing units (GPUs), which are used to train and run AI models. The company has built an entire computing platform around its processors, including networking equipment, software, and systems designed to work together. Its CUDA software platform also gives developers tools to build applications that run on Nvidia's hardware.

And its Vera Rubin computing platform is already moving into production, giving Nvidia another opportunity to sell more powerful systems to its customers. Nvidia also generates enormous amounts of cash that it can use to develop new products, invest in AI companies, and reward shareholders. The company returned $26 billion to shareholders through repurchases and dividends in its latest quarter.

Broadcom is building an impressive AI business of its own

Broadcom has nothing to hang its head over. The company carved out a valuable position in the AI market by designing custom processors, known as application-specific integrated circuits (ASICs).

ASICs are tailored to the tasks they need to handle. The chips may not be as powerful or flexible as Nvidia's GPUs, but they can be just as efficient for specific tasks and are more affordable. That's appealing to major cloud providers that are spending billions on AI infrastructure.

Broadcom also supplies networking technology that connects processors and other equipment inside data centers. As AI systems become larger, moving information efficiently between chips becomes increasingly important.

The financial results show just how successful Broadcom has become. In its fiscal 2026 third quarter, Broadcom reported revenue of $29.6 billion, an increase of 86% from a year ago. The company generated $13.7 billion in free cash flow, giving it substantial resources to invest in its business and return money to shareholders.

Management also projected fourth-quarter revenue of approximately $34.8 billion, representing 93% year-over-year growth.

Why Nvidia gets my vote

I wouldn't be surprised if both companies deliver strong returns over the next five years. Broadcom's custom chip business has significant potential, particularly as major technology companies seek alternatives to Nvidia's processors.

But I think Nvidia has a stronger competitive position. Its GPUs are critical to the AI build-out, and its software, networking equipment, and complete systems give customers ample reasons to stay amid an increasingly competitive environment.

If I'm choosing just one AI stock to hold through 2031, Nvidia gets my money.

Patrick Sanders has positions in Nvidia. The Motley Fool has positions in and recommends Broadcom and Nvidia. The Motley Fool has a disclosure policy.