Is AMD or Broadcom the Best AI Chip Stock After Nvidia?
Written by Justin Pope for The Motley Fool -> Broadcom and Advanced Micro Devices compete in AI chips, but have very different strategies and products. Broadcom's custom silicon game plan has yielded several blockbuster partnerships with $100 billion in annual sales on the way.
Broadcom and Advanced Micro Devices compete in AI chips, but have very different strategies and products.
Broadcom's custom silicon game plan has yielded several blockbuster partnerships with $100 billion in annual sales on the way.
The stock is more expensive than AMD's, but it's worth paying that premium.
Nvidia still dominates the market for chips used in artificial intelligence (AI) data centers. But AI is such a tremendous opportunity that second place isn't so bad in this case. Statista estimates that the AI chip market will continue to grow, reaching $333 billion by the end of the decade.
That leaves plenty of room for other companies to make investors quite a bit of money over the coming years. Broadcom (NASDAQ: AVGO) and Advanced Micro Devices (NASDAQ: AMD) would be two prime candidates. Both have made inroads with their AI chips, but when it's all said and done, one stands out above the other. Here's why Broadcom is likely the better AI chip stock to own.
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The million-dollar question is, how does a smaller company compete with the industry giant? Advanced Micro Devices, or AMD for short, is primarily competing head-to-head with Nvidia in general-purpose AI chips. To its credit, AMD has gotten some traction; data center revenue grew by 57% year over year to $5.8 billion in the first quarter of 2026.
AMD is naturally going to see some opportunities from the AI hyperscalers who don't want to put all their eggs in Nvidia's basket. AMD recently announced plans to supply Meta Platforms with 6 gigawatts of its Instinct GPUs, including a custom version for the first gigawatt. But it's unlikely that AMD will ever threaten Nvidia's stranglehold, since Meta and other Nvidia customers have already leaned heavily on Nvidia's CUDA software.
