This AI company could disrupt Nvidia and its stock is a screaming buy

There is not much debate about it Nvidia (NASDAQ: NVDA ) The best way to invest in AI since its inception in 2023. Its stock has risen 1,100% since then, but has delivered relatively low returns in August of last year.

There is a general feeling in the market that Nvidia cannot keep up and is gearing up for disruption. I don’t necessarily agree with this and still think Nvidia is a worthy investment choice – but so is this company trying to disrupt Nvidia’s business.

Will AI create the world’s first trillionaire? Our team just published a report on a little-known company, called “Essential Dependency” that provides critical technology to both Nvidia and Intel. Continue »

Nvidia’s biggest competitor right now Broadcom (NASDAQ: AVGO ). Broadcom is taking a different approach to AI computing, and it’s unique enough that it can carve out a niche that allows Nvidia to still make a ton of money, but also offers monster growth for Broadcom investors.

Nvidia makes graphics processing units (GPUs), which are great for handling many types of workloads. This makes Nvidia computing hardware the go-to option for many customers, as they can do almost anything on these units. However, GPUs are not always the most efficient choice. If the GPU only sees one type of workload throughout its service life, these additional capabilities are wasted.

This is where the custom AI chip from Broadcom comes in. It partners directly with AI Hyperscaler to design custom chips that fit their specifications. While they don’t have the flexibility that GPUs do, they can deliver similar performance in some applications at a cheaper price point. The most famous example of a custom AI chip is Google’s Tensor Processing Unit (TPU). TPU has allowed Google to return to the top positions of manufacturing AI, and is a popular computing option for rent from its cloud computing platform.

Broadcom expects monster growth from its AI semiconductor division over the next few years. During Q1 of fiscal 2026 (ending February 1), Broadcom generated $8.4 billion in AI semiconductor revenue, up 106% year over year. In the next quarter, it expects that number to rise 76% year over year to $14.8 billion. By the end of 2027, this business unit is expected to generate more than $100 million in revenue.

That’s monster growth, and makes for an incredibly successful stock if Broadcom can deliver on those promises. Some of those sales will come at the expense of losing Nvidia, but there’s still plenty of room for both companies to grow because of the massive demand for AI hardware. I think each of these stocks makes perfect sense to invest in right now, though Broadcom could outperform Nvidia if estimates pan out.

Before you buy stock in Broadcom, consider this:

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Consider when Netflix This list was created on December 17, 2004 … If you invested $1,000 at the time of our recommendation, You will have $508,607or when Nvidia This list was created on April 15, 2005 … If you invested $1,000 at the time of our recommendation, You will have $1,122,746!*

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* Stock Advisor returns to March 13, 2026.

Keith Drury holds positions at Broadcom and Nvidia. The Motley Fool has and recommends positions in Nvidia. The Motley Fool recommends Broadcom. Motley Fool has a disclosure policy.

This AI company could disrupt Nvidia and a screaming buy of its stock was originally published by The Motley Fool.