AMD vs. Broadcom: Who Will Dominate the Next Decade?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 20 2026
0mins
Should l Buy AVGO?
Source: Fool
- AMD's Strong Performance: In 2025, AMD achieved record full-year revenue of $34.6 billion with a gross margin of 50% and earnings per share of $2.65, and it anticipates a 32% growth in Q1 2026 with a non-GAAP gross margin of 55%, indicating robust market demand and sustained growth potential.
- Broadcom's Robust Outlook: Similarly, Broadcom posted record revenues in 2025 and is expected to continue this momentum into Q1 2026, boasting an AI-specific backlog of approximately $73 billion, highlighting its strong market position and future growth prospects in the AI sector.
- Valuation Challenges: Both AMD and Broadcom have high stock prices, with AMD's P/E ratio at 79 and Broadcom's at 68, reflecting market expectations for future growth but also potential valuation pressures, necessitating cautious risk assessment by investors.
- Competitive Landscape: Broadcom's diversified portfolio across custom chips, networking, and enterprise software provides multiple growth engines, positioning it to dominate the next decade, while AMD is also actively entering the AI market, indicating an intensifying competition.
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Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise
30 Analyst Rating
29 Buy
1 Hold
0 Sell
Strong Buy
Current: 379.750
Low
370.00
Averages
457.75
High
525.00
Current: 379.750
Low
370.00
Averages
457.75
High
525.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Partnership with Google: The collaboration with Google provides strong market validation for Broadcom's custom AI chips, particularly through supplying multiple gigawatts of TPU capacity to Anthropic, aiding in the expansion of AI models and enterprise applications, thereby solidifying Broadcom's market position in AI.
- Support from Non-AI Business: Broadcom's non-AI business constituted 56.5% of total revenue in the latest quarter, with this high-margin segment providing robust cash flow to support ongoing stock buybacks and dividend increases, demonstrating the company's resilience beyond AI growth.
- Dividend and Buyback Strategy: Although Broadcom's dividend yield stands at just 0.8%, the dividend has doubled over the past six years while the stock surged 996%, showcasing the company's success in buyback and dividend policies, which attract passive income investors.
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- AI Chip Collaboration: Broadcom will produce AI chips (MTIA) for Meta under a deal lasting until 2029, with an initial commitment of over 1 gigawatt of computing capacity, laying the foundation for Meta's AI data centers and further solidifying Broadcom's market position in the AI sector.
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- Strengthened Leadership Position: Broadcom CEO Hock Tan stated that this initial MTIA deployment is just the start of a sustained growth trajectory over the coming years, highlighting Broadcom's unmatched leadership in AI networking and the power of its XPU custom accelerator platform.
- Executive Role Transition: As part of the partnership, Tan will transition from Meta's Board of Directors to an advisory role, providing guidance on Meta's custom silicon roadmap and helping shape the future of their infrastructure investments, further solidifying the strategic ties between the two companies.
See More
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- AI Chip Sales Target: Broadcom aims for up to $100 billion in AI chip sales by fiscal 2027, reflecting its ambitious positioning in the rapidly growing AI market, especially considering AI accounted for only a small fraction of its revenue a few years ago.
- Partnership with Google: The collaboration with Google provides strong market validation for Broadcom's custom AI chips, particularly through supplying multiple gigawatts of TPU capacity to Anthropic, aiding in the expansion of AI models and enterprise applications, thereby solidifying Broadcom's market position in AI.
- Support from Non-AI Business: Broadcom's non-AI business constituted 56.5% of total revenue in the latest quarter, with this high-margin segment providing robust cash flow to support ongoing stock buybacks and dividend increases, demonstrating the company's resilience beyond AI growth.
- Dividend and Buyback Strategy: Although Broadcom's dividend yield stands at just 0.8%, the dividend has doubled over the past six years while the stock surged 996%, showcasing the company's success in buyback and dividend policies, which attract passive income investors.
See More
Broadcom and Meta Forge Key Partnership
- Stock Surge: Broadcom (AVGO) shares rose 3.2% in after-hours trading on Tuesday, extending a strong six-session winning streak, primarily driven by the expanded agreement with Meta, indicating market optimism about its future growth prospects.
- AI Chip Collaboration: Broadcom will produce AI chips (MTIA) for Meta under a deal lasting until 2029, with an initial commitment of over 1 gigawatt of computing capacity, laying the foundation for Meta's AI data centers and further solidifying Broadcom's market position in the AI sector.
- Executive Transition: Broadcom CEO Hock Tan will step down from Meta's board and become an advisor, guiding Meta on custom silicon and infrastructure investments, a shift that could influence Meta's technological strategy moving forward.
- Positive Market Sentiment: According to Stocktwits, retail sentiment for AVGO remains 'extremely bullish', reflecting investor confidence in Broadcom's future performance, especially as the stock approaches the critical $400 resistance level.
See More
AI Stocks Continue to Outperform Market Indices
- Broadcom's Chip Customization Edge: Broadcom has carved a niche in the AI chip market by offering customized application-specific integrated circuits (ASICs), with a 74% year-over-year increase in fourth-quarter AI semiconductor revenue indicating its competitive lead and potential for further market share growth.
- Micron's Shift to AI Infrastructure: Micron is pivoting from consumer products to AI infrastructure, with revenue nearly tripling year-over-year in Q2 and a 75% increase from the previous quarter, projecting current quarter revenue at $33.5 billion, showcasing its significant potential in the AI sector.
- Alphabet's Cloud Platform Growth: Alphabet's cloud computing platform surged 48% year-over-year in Q4, generating $5.3 billion in net operating income, reflecting strong demand for enterprise AI infrastructure and solidifying its market leadership.
- Investment Opportunities in AI Sector: As AI technology rapidly evolves, companies like Broadcom, Micron, and Alphabet are leveraging their technological advantages and market strategies to attract investor attention, with expectations to continue outperforming the S&P 500 over the next five years.
See More
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- Stock Market Surge: The S&P 500 index has rallied for nine out of the last ten trading sessions, nearing its all-time high, driven by investor optimism regarding U.S.-Iran negotiations, indicating strong confidence in future economic recovery.
- Strait of Hormuz Blockade: President Trump announced a new blockade of the Strait of Hormuz, impacting about 20% of global oil supply, with over 10,000 U.S. military personnel and several warships enforcing it, further complicating the uncertain situation in the Middle East.
- Aviation Industry Crisis: Experts warn that if the blockade persists, Europe's airline industry could face a
See More
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- Cramer Bullish on Uber: Despite Uber's stock being down 28.5% from its September high, it has risen 3.5% in the last two days, indicating market confidence in its future growth and potentially attracting more investor interest.
- Vistra Stock Undervalued: Cramer highlighted that Vistra is trading at around 19 times earnings, calling it a “steal,” and although the stock is down 25% from its September high, it has gained 6% in just two days, reflecting market recognition of its value.
- Booking Holdings Potential: Cramer believes that many negatives for Booking Holdings are already priced in, with a current P/E ratio of 17, and anticipates a significant price increase once the war ends; the stock has risen 4.4% in two days, presenting a potential return opportunity for investors.
- Southwest Airlines Turnaround Story: Cramer describes Southwest Airlines as a “terrific turnaround story,” noting that while the stock is down 25% from its February high, it has increased by 4.3% in two days and could be a potential takeover target, indicating future growth potential.
See More
Broadcom Partners with Meta for AI Chip Development
- Strategic Partnership: Broadcom has entered a three-year partnership with Meta to collaboratively develop AI chips and deploy them into data centers, which is expected to enhance both companies' technological advancements and market competitiveness in the AI sector.
- Initial Commitment Scale: Under the agreement, Broadcom will deliver over 1GW of technology support as part of the initial deployment of Meta's Training and Inference Accelerator (MTIA) chips, marking the beginning of a sustained multi-gigawatt rollout plan.
- Strengthened Leadership Position: Broadcom CEO Hock Tan stated that this initial MTIA deployment is just the start of a sustained growth trajectory over the coming years, highlighting Broadcom's unmatched leadership in AI networking and the power of its XPU custom accelerator platform.
- Executive Role Transition: As part of the partnership, Tan will transition from Meta's Board of Directors to an advisory role, providing guidance on Meta's custom silicon roadmap and helping shape the future of their infrastructure investments, further solidifying the strategic ties between the two companies.
See More
