Broadcom Poised to Surpass Nvidia by 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 07 2026
0mins
Source: Fool
- Market Leadership: Broadcom's AI computing units are expected to propel the company into a market leadership position by 2026, particularly in the custom AI chip sector, potentially surpassing Nvidia and reshaping the competitive landscape.
- Revenue Growth Expectations: Broadcom's management anticipates that revenue from AI semiconductors will double year-over-year in the first quarter, and with the launch of more custom AI chips, the company is poised for rapid growth, further enhancing its performance.
- Strategic Partnerships: By partnering directly with AI hyperscalers to design application-specific integrated circuits (ASICs), Broadcom's custom chips can outperform Nvidia's general-purpose computing units at a lower cost for specific workloads, thereby strengthening its competitive edge in the market.
- Investment Timing: As Broadcom rises in the AI sector, it is expected that more investors will focus on the company by 2026, indicating that now remains a great time to buy its stock, reflecting market confidence in its future growth potential.
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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: 372.450
Low
370.00
Averages
457.75
High
525.00
Current: 372.450
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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- Deepening Customer Partnerships: Qualcomm's multi-generational agreement with Meta Platforms, which will deploy Qualcomm's Dragonfly C1000 CPU in its servers starting this year, not only provides a stable long-term revenue stream but also enhances Qualcomm's competitive position in the data center market.
- Profitability Enhancement: Qualcomm expects its earnings per share to exceed $18.00 by fiscal 2029, with an annual growth rate of 18.5%, indicating significant profit growth potential over the next three years, which could drive stock price increases.
- Valuation Attractiveness: With a current price-to-earnings ratio of just 17 times and a sales multiple of 4.6 times, Qualcomm presents a valuation advantage compared to peers, suggesting that any acceleration in growth could lead to a premium valuation and further enhance investment appeal.
See More
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- Data Center Revenue Projection: Qualcomm anticipates its data center revenue could reach $15 billion by fiscal 2029, indicating strong potential in the rapidly growing AI market, particularly with a multi-generational agreement with Meta that ensures a long-term revenue stream.
- AI Chip Market Breakthrough: Qualcomm's focus on inference workloads for its AI chips is expected to significantly enhance its market share, especially as Deloitte predicts that inference workloads will account for two-thirds of AI computational workloads, indicating a rapid increase in market demand.
- Profitability Enhancement: Qualcomm estimates earnings per share could exceed $18 by fiscal 2029, reflecting an annual growth rate of 18.5%, which, compared to its current EPS of $10.80, suggests strong profit growth potential that could drive stock prices up by 150%.
- Competitive Advantage Strengthening: With a current P/E ratio of just 17, significantly lower than its competitors, any increase in Qualcomm's growth rate could lead to a premium valuation, paving the way for greater stock price appreciation and further solidifying its position in the AI chip market.
See More
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- Manufacturing Capacity Advantage: Intel's chip manufacturing business is seen as a key solution to industry production capacity shortages, with CEO Lip-Bu Tan prioritizing its revitalization since taking over in March 2025, aligning with the U.S. government's focus on advanced semiconductor manufacturing.
- Potential Collaboration with Apple: Although unconfirmed, a reported agreement between Intel and Apple to design and manufacture chips in the U.S. could further enhance Intel's market position, especially against rival TSMC, underscoring Intel's significance in the U.S. semiconductor industry.
See More
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- Semiconductor Sector Surge: The Philadelphia Semiconductor Index soared over 80% in Q2, driven by a surge in AI computing demand, highlighting strong market interest in semiconductors, while Nvidia's stock only gained about 12%, failing to keep pace with industry growth.
- Intensifying Competition Impact: Nvidia faces competitive pressure from major clients like Google and Amazon, who are developing their own AI chips, leading to diminished investor confidence in Nvidia's future growth and potentially impacting its market share and profitability.
- Insufficient Buyback Plans: Despite Nvidia's plan to repurchase $80 billion in stock in FY2025, analysts argue this is inadequate and recommend the company adopt a more aggressive buyback strategy similar to Apple's to enhance earnings per share and shareholder returns.
- Increasing R&D Investments: Nvidia's R&D spending reached $13.65 billion in FY2024, a 45% increase year-over-year, yet market expectations for future growth remain clouded by competition and market dynamics, necessitating buybacks to bolster investor confidence.
See More
Surge in ASIC Demand Intensifies Competition Between Broadcom and Marvell
- Surge in Market Demand: The demand for application-specific integrated circuits (ASICs) is expected to triple between 2024 and 2027 due to the increasing need for data centers to handle artificial intelligence workloads, indicating a robust market potential.
- Broadcom's Market Dominance: With a 70% market share in custom AI chips, Broadcom's AI semiconductor revenue soared by 143% in Q2 of fiscal 2026 to $10.8 billion, showcasing its strong growth momentum in the sector.
- Marvell's Growth Potential: Although Marvell anticipates a 20% increase in custom AI chip revenue this fiscal year, its future growth prospects remain promising, with expectations of exceeding $10 billion in revenue by fiscal 2029, indicating an improving competitive stance.
- Financial Performance Comparison: Broadcom reported a 48% increase in consolidated revenue last quarter, while Marvell's revenue grew only 28%, highlighting Broadcom's advantage in earnings growth rate, with projections of a 70% increase for Broadcom compared to 42% for Marvell this fiscal year.
See More
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- Partnership Selection: Google has chosen MediaTek to develop TPUv9 (Triggerfish), replacing Broadcom and Qualcomm, indicating strong confidence in MediaTek's capabilities in the AI chip sector.
- Market Positioning Advantage: GF Securities analyst highlights MediaTek's Triggerfish potential due to higher ASP/content and large SRAM design, which may allow it to surpass Broadcom in the inference market, further solidifying its competitive position.
- Revenue Forecast Upgrade: The expectation for MediaTek's ASIC-related revenue in 2028 has been raised from $1.5 billion to $2.3 billion, reflecting market recognition of its future growth potential.
- Competitive Dynamics Analysis: Analysts believe Broadcom's Bladerunner project has not yet commenced, and it is expected to launch only one new TPU SKU in 2028, showcasing MediaTek's technological advancement lead.
See More
