Broadcom(NASDAQ: AVGO ) and Advanced Micro Devices(NASDAQ: AMD ) have turned back Nvidia In recent years in the artificial intelligence (AI) chip market. Still, both companies are now experiencing a good boost in their growth due to their growing influence in this market.
As it turns out, both chip designers have picked up Nvidia stock over the past year. While Broadcom grew 69% during this period, AMD recorded a strong gain of 92%. But if you were to choose AMD or Broadcom for your portfolio right now, which would be the better bet?
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Let’s find out.
Image source: AMD.
Broadcom dominates the custom AI processor market with an estimated share of 60% to 80%. These custom processors, known as application-specific integrated circuits (ASICs), are in great demand from hyperscalers and AI companies that reduce reliance on Nvidia, achieve significant cost reductions, and accelerate performance while keeping power consumption in check.
Market research firm TrendForce expects ASICs to account for 27.8% of AI server chips this year, up from 20.9% in 2025. Broadcom is one of ASIC’s growing winners. It reported a 106% year-over-year increase in AI revenue in the first quarter of fiscal 2026 (which ended on February 1).
This outstanding growth was driven by Broadcom’s impressive customer base, which includes the alphabet, Meta platformsAnthropic, and OpenAI. Broadcom points out that it has six AI customers in total, all of which are poised to significantly accelerate the deployment of its custom chips in the coming year. Anthropic, for example, is expected to triple Broadcom’s ASICs deployment to 3 gigawatts (GW) next year. Similarly, meta-platforms are expected to scale to several gigawatts in deployments of Broadcom processors in the coming year.
Such impressive customer movement explains why Broadcom is confident of achieving $100 billion in AI revenue by 2027. That would be a huge increase over the $20 billion in AI revenue last fiscal year. Not surprisingly, analysts increased their growth expectations for Broadcom following its latest report.
AVGO’s revenue estimates for the current fiscal year data from YCharts
So, there is a strong chance of this AI stock to maintain its healthy momentum and deliver more upside to investors.
AMD makes both central processing units (CPUs) and GPUs used in computers, data centers, and gaming consoles. However, the company plays second fiddle to Nvidia in the data center GPU market. But CEO Lisa Sue is confident that the company can double its market share in this space in the next three to five years.
Importantly, AMD’s data center revenue is now growing at a healthy clip, suggesting that it is indeed on its way to improving its position in this lucrative market. The company reported $16.6 billion in data center revenue for 2025, up 32% from last year.
AMD credited this strong growth to the growing adoption of its Instinct data center GPUs. Looking forward, Instinct processors should continue to drive strong growth in AMD’s data center business, especially given that it has secured billion-dollar deals with several customers. Meta Platforms, for example, is ready to accommodate up to 6 GW of its Instinct GPUs.
This deal could give AMD a big boost in the long run. In addition, it already has an agreement with OpenAI to deploy 6 GW of chips to help build the latest computing capacity. The transaction is set to commence in the second half of 2026. Additionally, there are additional catalysts in AMD’s bag, such as the growth of the AI-focused personal computer market and its growing influence in AI server CPUs.
As such, it’s easy to see why analysts are predicting a 59% increase in AMD’s earnings this year to $6.64 per share. The good news is that this bottom line growth will remain strong over the next two years.
AMD EPS estimates for current fiscal year data by YCharts
Both AMD and Broadcom are growing at strong rates, and they are likely to maintain their momentum in the future thanks to the secular growth of the AI chip market. Investors should therefore take a closer look at their valuations before deciding which of these AI stocks are worth investing in.
AMD PS ratio data by YCharts
Although there isn’t much difference between their forward earnings multiples, AMD’s sales multiple of 9 is significantly lower than Broadcom’s 24. Still, the potential growth Broadcom could deliver in its AI revenue next year could help justify the large premium. As such, investors cannot go too wrong if they invest in these semiconductor companies as both of them are positioned for impressive growth in the future.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has and offers positions in Advanced Micro Devices, Alphabet, Meta Platforms, and Nvidia. The Motley Fool recommends Broadcom. Motley Fool has a disclosure policy.
The Best Artificial Intelligence (AI) Stocks: Broadcom vs. AMD was originally published by The Motley Fool.
