Nvidia's market cap stands at $5.4 trillion against Broadcom's $1.7 trillion, and Nvidia's most recent quarterly revenue already nearly matches Broadcom's full fiscal 2027 AI semiconductor revenue target, according to Motley Fool analyst Keithen Drury. Broadcom's custom AI chips are growing faster in percentage terms, but Drury still gives the edge to Nvidia's GPU business.
Nvidia's GPU business is quite a bit larger than Broadcom's
Nvidia trades at $225.07, up 0.22%, for a $5.4 trillion market cap. Broadcom, by contrast, trades at $352.81, up 0.7%, for a $1.7 trillion market cap.
Nvidia builds broad-purpose GPUs that can handle nearly any computing workload, while Broadcom makes application-specific chips, or ASICs, purpose-built for individual customers. According to Drury, ASICs can outperform GPUs on a specific task at a lower price point, but they cannot match a GPU's flexibility across workloads.
Broadcom's growth is faster, but off a smaller base
Broadcom expects to generate $115 billion in AI semiconductor revenue in fiscal 2027. That figure is set to double to $230 billion in fiscal 2028.
Nvidia, however, already generated $96.2 billion in revenue in its most recent quarter. It expects $108 billion in revenue for the current quarter. More than 90% of that revenue comes from its data center division.
For fiscal 2027, Nvidia estimates its own revenue growth will run around 70% — slower than Broadcom's AI chip growth rate, but still fast, according to Drury.
Drury still gives the nod to Nvidia
Drury writes that Nvidia's GPUs remain hard to bet against because of their universal nature. As he puts it: "Broadcom is one slip-up away from losing a major client". Still, he says the case for Broadcom holds up too, given its faster growth rate.
Drury counts both stocks among his top five picks and argues investors don't have to choose only one to be satisfied with the returns over the next few years.
Source: Fool
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